Wine World Predictions Point to a Smaller but More Premium Future

The wine industry is facing a period of significant change as it moves into 2026. Consumption is continuing to decline, a trend that has been observed in both the United States and Europe. Older consumers are drinking less or have stopped altogether, while younger generations are not adopting wine at the same rate as previous ones. This shift has led to a drop in demand, with some vineyards in regions like California and France being uprooted or left unharvested. In California, for example, the 2024 harvest was the smallest in years, with a 23 percent decrease from 2023 and more than 100,000 tons of grapes left on the vines.

Tariffs have also played a role in shaping the market. The 15 percent tariffs on European wines have made imported bottles more expensive, further discouraging consumption at a time when the industry is already struggling with its identity. Despite these challenges, there are signs that younger wine drinkers are seeking out higher-quality wines and are willing to pay more for authenticity and sustainability. Premium brands that focus on these values and target younger demographics may be better positioned to succeed.

One area showing growth is the market for low- and no-alcohol wines. Producers are responding to consumer interest by improving quality and expanding their offerings. In the United States, Rachel Martin of Oceano Wines has introduced single-vineyard low- and no-alcohol wines from California’s San Luis Obispo Coast. Julien Fayard, originally from Bordeaux and now based in Napa Valley, launched Les Vins Julien in 2021 to explore low-alcohol wines made without dealcoholization processes. He works with local growers to source grapes that naturally produce lower sugar levels, resulting in wines with reduced alcohol content but full flavor.

French Bloom, a high-end alcohol-free sparkling wine brand owned by LVMH, has also invested in this category by purchasing a vineyard in Limoux, France. The move reflects growing attention to both nonalcoholic beverages and sustainability within the industry.

Wine auctions remain robust despite broader market challenges. Several notable sales in 2025 demonstrated strong demand for mature Bordeaux and Champagne. At Sotheby’s, global head of wine and spirits Nick Pegna reported a return to pre-pandemic engagement levels, with more bids per lot and sellers bringing rare bottles to market after previous delays. Tariffs have made domestically available wines more attractive at auction compared to newly imported bottles.

Climate change continues to influence grape selection and winemaking practices. Producers are experimenting with new grape varieties that can withstand extreme weather and disease pressures. In Champagne, Voltis—a fungus-resistant hybrid—was harvested for the first time under experimental approval. Bordeaux added several hybrids such as Sauvignac, Souvignier Gris, Floréal, Vidoc, and Voltis to its list of permitted varieties in 2023 due to their resilience during hot and wet seasons.

Other regions are also seeing renewed interest in lesser-known grapes. Marselan, a cross between Cabernet Sauvignon and Grenache known for its resistance to heat and pests, is gaining traction globally. In southern Italy, Perricone is making a comeback because it thrives in hot, dry conditions. On Spain’s Mediterranean coast, nearly extinct varieties like Forcada and Pirene are being revived through efforts by producers such as the Torres family.

Wine tourism is expected to grow further in 2026, driven largely by millennials who now represent the largest generation of wine consumers in America. Their focus on authenticity and unique experiences is shaping new tourism offerings in wine regions across the country. Wineries are developing tasting experiences and culinary options tailored to this demographic’s preferences for quality and sustainability.

According to Deloitte research cited by industry observers, spending on experiences is projected to rise by 16 percent compared to last year. This trend is leading wineries to collaborate with renowned chefs or offer innovative food options alongside tastings. Sustainability-focused tours are becoming more popular as well, reflecting broader consumer concerns about environmental impact.

The coming year will likely see continued adaptation within the wine industry as it responds to changing consumer habits, economic pressures, climate challenges, and evolving tastes among younger generations. While overall consumption may be down, areas such as premium wines, low- and no-alcohol products, auctions of rare bottles, new grape varieties, and experiential tourism are all expected to play important roles in shaping the future of wine in 2026.