The U.S. Wine Industry hit an all-time high of $115 Billion in sales in 2025, masking structural changes in the industry. getty
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Even though wine sales in the U.S. market hit an all-time high of $115 billion in 2025, experts are concerned that higher wine prices are masking structural issues in the market, according to the new 2026 BMO Wine Market Report.
“What we’re seeing isn’t a pause — it’s a reset. Higher prices are keeping overall market value elevated, but they’re masking a structural slide in consumption,” stated Adam Beak, Head of Wine & Spirits at BMO (Bank of Montreal) and one of the report’s authors.
At the same time, more than 71% of wineries surveyed for the BMO report expect the U.S. wine industry to stabilize or rebound within the next three years, while 38% believe it will take even less time to recover.
To learn more about the report’s premise that the record-breaking $115 billion in 2025 U.S. wine sales is masking deeper industry problems, I reached out to two of the report authors, Adam Beak of BMO and Andrew Adams, editor of Wine Analytics Report, for online interviews.
“Wineries with the willingness and resources to commit to retaining their existing customers while successfully engaging new ones should be able to navigate this challenging market,” stated Andrew Adams.
As editor of the Wine Analytics Report, Adams and his team were responsible for surveying U.S. wineries to provide accurate representation by winery region, size, and price point. Other report contributors include Baker Tilly, BW166, and Gomberg, Fredrikson & Associates.
U.S. Wine Market 9-Liter wine cases shipped from 1990 to 2025
TTB, Gomberg-FredriksonReasons for the U.S. Wine Market Reset
So why do the report authors believe that $115 billion in U.S. wine sales illustrates a glossy growth story, but lacks the unit economics to support it?
The main reason, according to Beak and Adams, is that Americans are drinking less alcohol overall — not just wine. However, when they do purchase wine, they are choosing more expensive bottles rather than the high volumes of lower-priced wines that flew off supermarket shelves prior to 2019, when the slowdown first began.
Inflation, tariff disruptions, and higher supply costs for equipment and fuel have also forced retailers to increase bottle prices, pushing total U.S. wine market sales higher each year even though volume sales declined by 4% in 2025.
“Fewer people are drinking wine, and they’re doing it less often,” stated Beak. “But they are drinking better, more expensive wines.”
This has resulted in thousands of bottles, barrels, and tanks of wine going unsold and sitting in inventory at winery and distributor warehouses. For some wineries with overextended balance sheets, this has resulted in bankruptcies and closures.
Some grape growers are also affected because wineries have canceled grape purchase contracts, as described in this 2025 Forbes article, forcing growers to leave grapes to rot on the vine, pull out vineyards, or sell their land.
Furthermore, the number of wineries in the U.S. has increased by nearly 50% over the past decade, according to Adams. As the wine industry boomed from 2009 to 2019, many entrepreneurs decided to start their own wineries. In addition, thousands of international wineries and importers shipped wine to the lucrative and growing U.S. market — still the largest wine market in the world by revenue.
But surplus volume is not the only issue. “Distribution is changing, and direct-to-consumer isn’t growing the way it once did,” added Beak.
Indeed, the number of wine distributors in the U.S. has declined over the past decade, and this year the large distributor, RNDC, was forced to lay off staff and sell portions of its business — negatively impacting many wineries that relied on the company to distribute their wines within the complicated three-tier U.S. wine market.
Competition in the beverage space has also intensified, with many new types of drinks flooding the market, including THC-infused beverages, ready-to-drink (RTD) cocktails, and flavored alcoholic beverages of all kinds. These new products have suppressed sales in some traditional wine categories.
Finally, changing demographics in the U.S. are impacting wine sales. The wealthy and aging Baby Boomer generation — once the champions of wine consumption — reduced their share of wine consumption from 34% in 2023 to 26% in 2025, according to Wine Market Council research. Millennials are now the largest wine-consuming population, but they are not drinking wine at the same volume levels as their Boomer parents.
Adam Beak, Head of Wine & Spirits at BMO and Andrew Adam, editor of Wine Analytics Report
BMO & Wine AnalyticsInnovative Solutions Needed to Drive a Rebound in the U.S. Wine Market
So what is needed to turn the situation around? Beak and Adams believe it will require a variety of solutions.
“For many wine producers, this is becoming less about managing through a cycle and more about adapting to a new baseline. The combination of softer demand, tighter distribution, and rising costs is pushing wineries to operate with more discipline, focusing on profitability, channel mix, and brand positioning in a way the industry hasn’t had to before,” stated Beak.
He points not only to strong financial and business planning, but also to innovative solutions. For example, the flavored wine market is growing, and some entrepreneurial wineries are adding these new styles to their portfolios.
Others are embracing the private-label wine trend, in which producers bottle and label wines for another business, such as a grocery store, restaurant, or retail chain. Trader Joe’s, Costco, and Aldi are all examples of retailers that work with wineries to craft custom wines for their customers.
According to Danny Brager, wine industry analyst with Azur Associates, several wine categories are showing growth. These include not only flavored wines, but also wine RTDs, light and fresh white wines such as sauvignon blanc, white blends, sparkling wines, wines with lower calories and no added sugar, and wines in smaller or more distinctive packaging, among other categories.
“Wineries with the willingness and resources to commit to retaining their existing customers while successfully engaging new ones should be able to navigate this challenging market,” stated Adams.
“While there are fewer Americans drinking wine, those who do continue to spend more than ever,” Adams continued. “It’s not going to be easy, but the savvy and competitive wineries that can hold on to their market share through this contraction will be in a prime position for future growth.”
In the meantime, this environment presents an opportunity for wine-loving Americans to find excellent bargains. The BMO report states that many wineries are selling excess wine through flash reseller websites, discount grocery stores, and even as “shiners” — unlabeled bottles.
“Wineries that succeed in this next phase will be the ones that adapt how they price, package, and go to market, rather than waiting for consumers to come back on their own,” concluded Beak.
The U.S. Wine Market needs to innovate and create new styles and formats of wine for different consumers
gettyWine — An 8,000-Year-Old Industry
So while the lucrative $115 billion U.S. wine market continues to restructure and innovate, many wine-producing countries with thousands of years of winemaking history — including France, Italy, Germany, and Spain — are preparing themselves for another downturn and eventual upturn in the wine cycle.
Producers such as Italy’s Antinori winery, founded in 1385 and now managed by the 26th generation of the family, have witnessed these cycles before. They understand that wine will remain a constant beverage in human society because it has been produced for more than 8,000 years.
Even before humans made wine, nature itself could — and still can — produce a sweet, fruity, low-alcohol wine through natural fermentation. This occurs when grapes or berries encounter native yeast and begin fermenting naturally. Scientific studies have even documented birds becoming intoxicated from eating naturally fermented grapes and berries, according to Audubon Science.
In the end, wine will continue to win over new generations who learn to appreciate the pleasures, social connections, romance, and celebrations that wine can bring — when consumed in moderation.
Eurasian blackcap (Sylvia atricapilla). Bird eating grapes.
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