E&J Gallo Closes Ranch Winery and Cuts Jobs as Wine Demand Plummets

E. & J. Gallo, the largest wine company in the United States, is undergoing a significant corporate restructuring as it responds to declining demand in the wine industry. The company has announced the permanent closure of its Ranch Winery in St. Helena, California, and will lay off all 56 employees at that facility by April 15, 2026. This move is part of a broader reduction that includes layoffs for 37 additional employees across four other Gallo-owned sites: Louis M. Martini Winery and Orin Swift Tasting Room in St. Helena, as well as J Vineyards & Winery and Frei Ranch in Healdsburg.

The closures and layoffs were disclosed in Worker Adjustment and Retraining Notification (WARN) notices filed with the California Employment Development Department on February 12. These actions highlight the urgent need for Gallo to reduce excess production capacity amid a sharp downturn in wine consumption and sales.

Industry data shows that U.S. wine volume dropped to 329 million cases produced in 2025, down from 335.9 million cases in 2024. Revenue also fell to $74.3 billion in 2025 from $75.5 billion the previous year, according to Silicon Valley Bank’s U.S. Wine Industry Report. Since 2020, annual revenue for the industry has declined by $19.7 billion, or 21%, falling from $94 billion to $74.3 billion.

Experts attribute much of this decline to changing consumer habits. Baby Boomers, who have historically been the largest group of wine drinkers, are consuming less wine as they age, while younger generations are not adopting wine at the same rate. Rob McMillan, executive vice president and founder of Silicon Valley Bank’s Wine Division, noted that “Boomers are drinking less, and there are fewer of them every day.” He added that younger consumers under 30 drink less than any similarly aged group since records began.

This shift in demographics has forced not only large producers like Gallo but also smaller wineries to adapt quickly or face closure. Earlier this year, Vermeil Wines, owned by former NFL head coach Dick Vermeil, closed its tasting room in downtown Napa due to similar pressures from the evolving market.

Gallo’s decision to close facilities and reduce its workforce reflects broader trends affecting California’s wine country and the national industry as a whole. The company’s actions underscore the challenges facing winemakers as they navigate reduced demand and changing consumer preferences across generations.