The wine industry has faced a crisis over the last five years, as the top wine-drinking generation, the Baby Boomers, are drinking less wine, while younger generations like Gen Z are slow to embrace wine, according to experts.
“Boomers are drinking less, and there are fewer of them every day,” wrote Rob McMillan, executive vice president and founder of the Silicon Valley Bank Wine Division.
“They are replaced by the younger cohorts who aren’t as much in love with wine as their elders,” McMillan, author of Silicon Valley Bank’s State of the US Wine Industry Report, wrote.
Under-30 consumers drink the least
“It should be noted that this current flock of consumers under 30 drink less than any similarly aged group, as far back as records go,” he said.
The impact of lower wine consumption has forced major wine companies like E. & J. Gallo to shut down facilities and lay off employees.
Lower consumption has meant a decline in volume and revenue in the industry.
U.S. wine industry volume declined to 329 million cases produced in 2025, compared to 335.9 million cases in 2024.
Wine industry revenue also declined in 2025 to $74.3 billion, compared to $75.5 billion in 2024, according to Silicon Valley Bank’s U.S. Wine Industry Report.
Annual revenue falls 21% since 2020
The industry’s annual revenue has declined by $19.7 billion, or 21%, since generating $94 billion in 2020.
The downturn in the wine business led former NFL head coach Dick Vermeil to close his Vermeil Wines tasting room in downtown Napa, Calif., on Jan. 31, the winery posted on Instagram.
Vermeil Wines said it needed to close the tasting room as it evolves with the rapidly changing wine market.
And now a much larger California wine company is closing down one of its wineries.
Gallo is closing its Ranch Winery and laying off a total of 93 employees at five of its wine facilities.
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Gallo closes Ranch Winery
E. & J. Gallo, the largest wine company in the U.S., is permanently closing its Ranch Winery in St. Helena, Calif., and laying off all 56 employees by April 15, 2026, according to a Worker Adjustment and Retraining Notification notice it filed with the California Employment Development Department on Feb. 12.
Gallo also filed WARN notices to lay off 37 other employees by April 15 at four of its wine facilities, including Louis M. Martini Winery and Orin Swift Tasting Room in St. Helena, Calif., and J Vineyards & Winery and Frei Ranch in Healdsburg, Calif.
More closings:
- Bankrupt restaurant chains permanently close popular locations
- Major retail chain closes 35 stores nationwide, no bankruptcy
- Another major retail chain closes warehouse operations
“Gallo is aligning parts of our operations with our long-term business strategy to ensure we remain well positioned for future success,” the company said in a statement reported by the San Francisco Chronicle.
“As part of this process, we made the difficult decision to reduce certain Wine Country operations. These changes are driven by market dynamics, evolving consumer demand and available capacity across our wineries,” the statement said.
Gallo went on shopping spree
The winery closing comes after Gallo completed a shopping spree with the purchase of Four Roses Bourbon for $775 million in early February, The Spirits Business reported. It also purchased Gen Z-inspired winery, Whiny Baby, in September 2025, VinePair reported.
The wine industry downturn, however, led Gallo to close Courtside Winery in San Miguel, Calif. in July 2025, according to the Chronicle. The wine company also sold its Wild Horse Winery in Templeton, Calif., and its Edna Valley facility in San Luis Obispo, Calif., in 2024.
Gallo Winery layoffs
- Ranch Winery, St. Helena, Calif., 56 employees
- Louis M. Martini Winery, St. Helena, Calif., 15 employees
- Orin Swift Tasting Room, St. Helena, Calif., 2 employees
- J Vineyards & Winery, Healdsburg, Calif., 11 employees
- Frei Ranch, Healdsburg, Calif., 9 employee
- Source: California Employment Development Department
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