After a depressing year in which nearly half of all wine grapes in California might not have been harvested, wineries might find themselves scrambling to find grapes this summer, according to an industry analyst.
The opposite is true for whiskey. American distilleries are so full of inventory that some big companies not only won't make whiskey this year: they might not make any for several years.
California's official grape crush report won't be issued until February, but bw166 founder Jon Moramarco estimated Thursday that it will be just 2.25 million tons, which would be the smallest crop in 46 years. It would be 24 percent less than 2024, and less than half of the size of the 2018 crop. The only good news out of that is that Moramarco thinks the state's wine industry may finally reach a balance this year between supply and demand.
In fact, because many farmers might choose not to tend their vineyards this year, Moramarco thinks it's possible California may even have a grape shortage.
"In June or July of this year we could see wineries needing grapes and not being able to find them," Moramarco said. "Time will tell."
But the US wine industry has lost market share in the last decade. Moramarco said domestic still wines made up 64 percent of the US market in 2018, and just 56 percent today. Imported sparkling wines (mostly Prosecco) have claimed much of that share.
Moramarco said the total wine market was down about 3 percent in 2025, and the spirits market was down about 2.1 percent, with Tequila and ready-to-drink cocktails being its two bright spots.
As for whiskey, Moramarco said in 2022 distillers put twice as much whiskey in barrels as in 2005, misreading a declining market. He said the industry as a whole is now sitting on 13 years' worth of inventory. He cited Jim Beam's announcement that it is shutting down production for a year, and Brown Forman selling its barrel operation as symptoms of overstuffed warehouses.
"This is going to take a few years to work through," Moramarco said. "Everybody's sitting on excess inventory. The good news is whiskey won't go bad."
Shipments of US whiskey to distributors dropped 6.5 percent in 2025; despite pressure from tariffs, imported whiskey shipments dropped just 1.4 percent.
Moramarco gets most of his statistics from official government sources, and he tries to paint a picture of the broader economy. He pointed out that overall consumer spending on alcohol continues to grow slightly – about 4 percent, according to the Bureau of Economic Analysis – even as sales of just about every category of alcohol are down. Price increases are part of the reason, and also consumers continue to prefer buying fewer bottles but spending more on them.
Alcohol still makes up one-sixth of all retail food and beverage revenue, according to the Bureau, and alcohol makes up 25.6 percent of spending in full-service restaurants (not counting fast food and quick service.)
How Many Grapes it Takes to Make One Bottle of Wine
But Americans are drinking less, Moramarco said, with the average adult dropping from 15 "servings" per week in 2020 to 13.5 last year. That is the lowest level since the 1960s. Keep in mind that the US population grew 65 percent between 1970 and 2020, according to the census bureau; this is how alcohol sales could keep growing even when individuals were drinking less. Servings per week peaked in 1982 and have been declining since, but the dropoff in the past five years is the steepest on record.
Moramarco said wine and spirits were in a downturn in the 1980s and growth didn't really start until the 1990s, with the baby boomers moving into drinking age. He says the reason today's young adults aren't drinking as much is largely economic: wages haven't kept up with housing costs, and student loan debt is at a historically high level. He said the implications go beyond just the alcohol industry.|
"Younger generations may not be able to keep up with the spending of their parents, and it's going to be a drag on the economy," Moramarco said.
Moramarco said some cash-strapped younger consumers are switching to private-label wines. He said that the big wine companies' mass-produced wines are struggling in grocery stores, but stores that specialize in producing their own labels are doing OK.
"If you go look at Trader Joe's or Grocery Outlet, there's a whole lot of lower priced wines that are not branded that are still selling out there," Moramarco said.
