After years of oversupply, California’s wine industry may be heading into an unexpected period of grape scarcity.
According to industry analyst Jon Moramarco, founder of bw166, the state could face difficulties sourcing wine grapes as early as this summer—despite a surplus recorded in the previous harvest.
The paradox stems from a crucial decision made during the last vintage: nearly half of the grapes intended for winemaking were left unharvested. Growers, responding to weak demand, low prices, and high production costs, chose to abandon significant portions of their crop. While this helped reduce excess inventory in the short term, it may now create supply-side pressure.
Although the official California grape harvest report will not be released until February, Moramarco estimates total production at around 2.25 million tons. If confirmed, this would represent:
- the lowest harvest volume in 46 years,
- a 24% decline compared to 2024, and
- less than half of the production achieved in 2018.
From a structural perspective, Moramarco believes this sharp contraction could finally help rebalance supply and demand in California’s wine sector. For years, the industry has struggled with excess grapes, falling bulk wine prices, and ballooning inventories. A smaller crop could bring pricing discipline back into the system.
However, the risk lies in grower behavior. Many vineyard owners, discouraged by recent losses, may decide not to fully tend their vineyards in 2026, further reducing available fruit. In Moramarco’s words, “In June or July of this year we could see wineries needing grapes and unable to find them.” Whether this scenario materializes remains uncertain, but the warning signals are clear.
Beyond viticulture, the grape shortage reflects a deeper challenge: declining wine consumption in the United States. Americans are drinking less wine—and less alcohol overall—forcing structural adjustments across the supply chain. While total consumer spending on alcohol has increased slightly, this growth is driven largely by higher prices and premiumisation, not higher volumes.
California’s potential grape shortage may therefore mark not just a cyclical correction, but a turning point—one that forces the industry to adapt to a smaller, more value-driven market.
Source: Vinetur
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