- U.S. wine spending exceeds $115 billion in 2025 as falling consumption, shrinking California supply and direct-to-consumer pullbacks force an industry reset
- Despite headwinds, wineries remain cautiously optimistic about the future
NAPA, Calif., May 12, 2026 /PRNewswire/ – Americans spent more on wine in 2025 than ever before — pushing total U.S. consumer spending on wine to more than $115 billion — but they also drank less of it, extending a multi‑year, structural decline in consumption that is forcing wineries to rethink how, where and what they sell.
According to the newly released 2026 BMO Wine Market Report, U.S. wine market value rose 3% in 2025, even as total market volume declined for another consecutive year. The data underscores a growing disconnect between price and demand, and highlights why wineries now face two parallel challenges: rebuilding consumer interest while also working through excess supply that continues to strain cash flow and liquidity across the industry.
At the same time, California – the backbone of U.S. wine production – is sending significantly less wine into the market. In less than a decade, wine entering the U.S. market from California has fallen by nearly 25%, reflecting vineyard pullbacks, a historically small harvest, and an industry adjusting to weaker demand rather than chasing growth at all costs.
“What we’re seeing isn’t a pause — it’s a reset. Higher prices are keeping overall market value elevated, but they’re masking a structural slide in consumption: fewer people are drinking wine, and they’re doing it less often. At the same time, supply is shrinking, distribution is changing, and direct‑to‑consumer isn’t growing the way it once did,” said Adam Beak, Managing Director and Head of Wine & Spirits at BMO. “Wineries that succeed in this next phase will be the ones that adapt how they price, package, and go to market, rather than waiting for consumers to come back on their own.”
“The wine industry is navigating a period of real adjustment. While higher prices have supported overall market value, many producers are facing ongoing pressure from softer demand, rising costs, and shifting distribution dynamics,” said Tony Sciarrino, Head, BMO Commercial Bank, U.S. “As a commercial bank deeply embedded in the wine ecosystem, we’re seeing firsthand how important it is for businesses to adapt thoughtfully to these changes in order to remain resilient and competitive.”
Demand Pressure Is Rewriting the Playbook
The report finds that demand weakness is rippling across every route to market:
- Direct‑to‑consumer sales are under pressure. Winery shipments fell 15% in volume to 5.4 million cases, while shipment value declined 6% to $3.7 billion as shipping costs rise and consumers pull back on discretionary spending.
- Distribution is destabilizing. Nearly one quarter of wineries surveyed reported losing a primary distributor, accelerating a shift toward wineries doing more of their own selling and treating wholesalers increasingly as fulfillment partners rather than growth engines.
- Not all wine categories are moving in the same direction. In 2025, flavored wines grew 12% while sparkling wine volumes declined 3%, underscoring increasingly fragmented growth as traditional table wine continues to lose ground.
Despite these headwinds, wineries remain cautiously optimistic about the future. 71% of wineries surveyed expect the U.S. wine industry to stabilize or rebound within the next three years, with 38% believing a turnaround could come sooner – even as many acknowledge that the next phase of growth will look very different from the last.
A Deeper, Data‑Driven Look at a Market in Transition
The 2026 edition also reflects the expansion of BMO’s Wine Partnership, with the addition of Baker Tilly – one of the wine industry’s leading professional services firms. Baker Tilly joins existing partners WineBusiness Analytics and bw166, strengthening the breadth and depth of market data behind the report.
Together, the expanded partnership brings economic, operational, and survey-based insights into a single, comprehensive view of the U.S. wine market, at a time when demographic shifts, pricing pressure, distribution disruption, and changing consumer behavior are reshaping the industry.
The 2026 report frames the current moment as a reset with fewer wineries, less excess inventory, smaller harvests, and more experimentation with pricing, packaging and routes to market. Private‑label and retailer‑exclusive wines are expanding, club stores are gaining importance, and wineries are being forced to compete in a market with more beverage options and price sensitivity than ever before.
The 2026 BMO Wine Market Report is based on comprehensive economic data and a national survey of U.S. wineries conducted between January 26 and March 2, 2026, with results weighted to reflect wineries of all sizes, regions and price points.
The full report is available here.
About BMO’s Wine & Spirits Group
BMO’s Napa, California-based Wine & Spirits Group has served the industry for decades. Its dedicated team understands the factors that affect the entire ecosystem, from wineries, vineyards, and distilleries to key support industries such as distributors, cork and capsule producers, barrel coopers, and harvesting equipment manufacturers. The group knows how industry and economic dynamics such as consolidation, commodity price fluctuations and changing consumer tastes can affect wine businesses, and its seasoned professionals can offer guidance to help navigate industry cycles. Those in the industry can get the full scope of the group’s capabilities, from managing cash flow to acquiring real estate or executing an expansion. With the experts of BMO Capital Markets integrated into its services, the group provides financing for mergers and acquisitions. BMO Commercial Bank also serves the needs of the entire food and beverage continuum, including beverage processors, suppliers, and manufacturers.
About Baker Tilly
Baker Tilly’s Wine Practice brings decades of experience advising wineries, vineyards, and wine businesses across the value chain. Building on the legacy of the Moss Adams wine practice, Baker Tilly provides integrated tax, assurance, and advisory services tailored to the unique financial, operational, and regulatory challenges of the wine industry. The firm works closely with owners and operators to support growth, succession planning, transaction readiness, and long-term sustainability—combining deep industry knowledge with national resources and global capabilities.
About bw166
BW166 LLC provides advisory services and data intelligence to the beverage alcohol industry. The company is also a partner in the Gomberg Fredrikson Report. The Gomberg Fredrikson report has been reporting on the US Wine Market since 1948. BW166 also produces the Total Beverage Alcohol Report that provides data across Beer, Wine, and Spirits. Both reports use government tax paid data for volume reporting which is the most complete view of the US market. In addition, the company uses data from other government entities such as the Bureau of Economic Analysis, Bureau of Labor Statistics, and the Census Department to add macro information on economics and demographics regarding the Beverage Alcohol Market.
About WineBusiness Analytics
WineBusiness Analytics maintains the wine industry’s most accurate databases and provides data-driven analysis, data, insights and reports to help clients grow and manage their businesses. In addition to databases, the analytics group also publishes the monthly Wine Analytics Report. WineBusiness Analytics is part of the WineBusiness company that publishes the leading B2B magazine for the wine industry, Wine Business Monthly, maintains the industry’s No. 1 jobs board at winejobs.com, is the leading source of daily wine news at winebusiness.com and hosts several conferences and tradeshows.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of January 31, 2026. Serving clients for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to approximately 13 million clients across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.
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