Shifting tastes, shrinking sales: Napa Valley’s wineries adapt amid ‘shocking’ downturn

Rob McMillan's 2025 state of the US wine industry report, published by Silicon Valley Bank, confirms a long-predicted downturn in California's wine sector after more than a quarter century of growth. The industry is now experiencing shrinking sales, production declines, and workforce layoffs, with export troubles compounding the pressure on producers. McMillan had warned since 2018 that a demand correction would hit the wine world, and that forecast is now materializing across Napa Valley and broader California regions. The report forecasts a "bumpy bottom" in demand through 2027 and 2028, signaling an extended period of adjustment for the industry. Smaller wine producers are responding by innovating their business models to survive the prolonged downturn.