There is no one I feel more empathy for than the serious California winemaker who struggles to make high-quality wines amid their statewide industry implosion. For any craftsperson endeavoring to make good and beautiful things—be it in art, media, design, or whatever—it must be so dismal trying to survive in our late-capitalist hellscape, competing with low-cost, inauthentic garbage.

This spring and summer brought forth an unrelenting string of bad news from California wine country. Most notably, in May, the San Francisco Chronicle declared “California Wine Is in Serious Trouble,” noting that wine consumption had dropped nearly nine percent in 2023. One well-known winemaker told the Chronicle, “A lot of brands are dead, but they don’t even know it right now.” Just yesterday, the newspaper also reported that much of this year’s upcoming California wine harvest could go to waste, with wine growers unable to sell their grapes.

Amplifying that message in Wine-Searcher, W. Blake Gray gravely suggests that “California Faces the Grape Apocalypse.” Gray notes that Gallo, the largest winery in the U.S., has begun to cut back its vineyard land, particularly Pinot Noir and Chardonnay in Sonoma County. “If Gallo, easily the best in the business at selling wine, thinks it can't sell Sonoma County Pinot and Chardonnay, that's a terrible sign for the near future of the U.S. wine market,” he writes.

All this follows a year of bad news from all over the world about the wine industry’s deep crisis. For some time now, I’ve been commenting on wine’s “existential crisis,” much of which has been self-inflicted.

Cultural Trends

Yes, yes, cultural trends are negatively affecting the market. Yes, young people are drinking less wine, people in general are drinking less for health reasons, and neo-prohibitionists are framing alcohol as “the new tobacco.” Just last month, the journal Addiction published a study showing that more Americans consume cannabis every day than drink wine every day.

But while it’s true that the industry does indeed need to react to these trends, blaming the problem on young people or cannabis or health advocates and neo-prohibitionists is not the answer. The truth is, Americans are still drinking. They’re just not drinking as much wine. A 2023 Gallup poll on drinking habits found that wine was Americans’ least preferred alcoholic beverage at 29 percent, trailing beer (37 percent) and spirits (31 percent).

Which brings me back to this week’s reports of a California wine apocalypse. Both the Chronicle and Wine-Searcher, rightly, put the focus of the crisis on bulk wine. We all need to clearly see the problem for what it is: The wine industry’s reliance on the sales of poor-quality, bulk wines.

Pricing

The price of “entry-level” wine has stagnated in the $9.99 to $11.99 range for more than a decade. Two years ago, the annual “State of the Wine Industry” report from Silicon Valley Bank made it clear: “The wine industry has allowed the lower-priced entry-level wines to be produced without transparency as to ingredients and in a homogenous and uninteresting way that’s unlikely to appeal to those young consumers who want to drink better and drink less today.”

For U.S. wine consumers, there’s essentially a line in the sand: $20. Above that is what the industry calls “premium wines.” Those sales are relatively steady, if slightly smaller. Below that price point is a vast ocean of American mass-market wines, and sales of these middling or even lousy wines are exactly what is in decline. That’s where the crisis is happening. Boohoo, right?

Certain industry people will cry, “But those $11.99 bottles are . . . starter wines!” Let’s be clear: The “starter wine” is a myth. “Starter” or “entry-level” are euphemisms for garbage wine. It is a false idea that younger drinkers with less-developed palates will begin drinking these bad wines and then evolve, as they get older, to consuming more sophisticated, higher-end bottles. There is no marketing study that backs up any of this. The same percentage of people would be just as likely to move to Burgundy from kombucha or juice boxes or Frappuccinos. In fact, the industry has relied on these wines for so long because boomers literally never moved on from starter wines as they aged.

American consumers have been telling us, for years, that they do not want what the industry is selling at $11.99. At that price, there are dozens of other beverage options. 

Study after study shows that young people are drinking less but spending more. Several show that millennials already spend more on wine, per bottle, than boomers do. According to the Wine Market Council, the sweet spot for prices these days is $20 to $25—and sales in this price range are up about two percent this year. (Yes. You read that correctly.) Sauvignon Blanc (as we reported this spring) is the most popular grape variety in the U.S., and its sales over $25 are up nearly seven percent. Overall, while volume is down, the amount of dollars spent on wine is up 46 percent since 2018.

Time to Evolve

But the industry remains trapped in its model of selling flashy brands that package bulk wine. As the Chronicle stated in May: “This is an industry that grew complacent, so accustomed to its baby boomer-dominant customer base and its old way of doing things that it hasn’t been forced to meaningfully innovate in a long time.”

It’s an industry that largely scoffed at natural wine, despite its popularity among younger drinkers. It’s ignored the fact that younger drinkers want fewer additives, more sustainable practices, ethical production, and transparency. California growers have even ignored the worldwide preference of white wines over red wines. In Gray’s Wine-Searcher piece, he notes that California growers have planted nearly twice as many red grapes over the past decade, even though white grapes sell better. This is an industry that’s completely lost sight of the consumer.

So, no, I don’t shed a tear for the corporate peddlers of shitty wine. What I am worried about is if the serious crisis they’ve created will soon drag down the quality winemakers still trying, against all odds, to make good wine.