U.S. wine exports to Canada fall 90% after provincial pullback
The California wine grape harvest could fall by as much as half this year, a drop that growers and analysts described as a relief valve for an industry weighed down by a multiyear sales slump and the near-disappearance of Canadian demand.
Heavy rains and unseasonable warm spells earlier in the growing season left many grapes underdeveloped, with some immature yellow fruit failing to ripen into the grapes used to make wine, according to the Sonoma County Winegrowers, which estimated the number of grapes ready to pick or already harvested will be 35% to 40% lighter than average. White wines came in heavier than reds.
“This is the wildest harvest I have ever experienced,” said Niki Wente, director of vineyard operations at Wente Family Vineyards in Livermore, Calif.
The shortfall is the latest symptom of a broader retrenchment. Wineries in California shipped 203 million cases last year, down 11% from the year before, according to industry data cited by The Wall Street Journal. American alcohol consumption has fallen to its lowest level in decades, with 54% of Americans reporting they drink — tying a record low first recorded in a Gallup poll that has tracked the figure for nearly 90 years, and which held steady this year. Wine ranked below spirits and beer as a drink of choice. Industry officials said most consumers who buy bottles for $20 or less have cut back their purchases.
Canada, once a lucrative export market, is also barely buying. Canadian provinces pulled most American alcohol from shelves in response to tariffs, according to the Wine Institute, an industry trade group. Canadian imports of U.S. wine averaged about $40 million a month before the pullback; they now stand at just above $5 million a month, a drop of roughly 90%.
“It is a godsend,” said Michael Honig, president of Honig Vineyard & Winery in Napa Valley, of the short crop. “The short crop is helping us survive right now.”
Many bottles from 2023 and 2024 — bumper-crop years — sit unsold at wineries across the state, which produces roughly four-fifths of America’s wine. Some operators left grapes to wither on the vine last year rather than add to the oversupply, while others have pulled out vines to match the new level of demand. Vineyard operators are also pivoting to raising cattle or growing other crops such as hay and barley, The Wall Street Journal reported.
“Many family businesses may be forced to exit the industry,” said Bourcard Nesin, an analyst covering the alcohol business at Rabobank. “Many believe that consolidation is unavoidable because, without higher grape prices, very few growers can generate sustainable profits.”
Juan Munoz-Oca, estates director for Marchesi Antinori’s U.S. business, said the current retrenchment looks different from past cycles. “What we are seeing today is different. Growers pulling out vines, mothballing vineyards and planting other crops points to something more structural than the cycles I have experienced.”
At Wente Family Vineyards, which has operated for 143 years, sales of the flagship Morning Fog Chardonnay in Canada fell to almost zero last year, Wente said. The family-owned business is leaning harder into cattle and hay: about 1,500 acres of its land now graze cattle, a figure the company hopes to expand by about 100 acres while beef prices are high. About 80 cows and bulls currently graze on the property. Roughly 400 acres are sharecropped for hay, up from about 250 acres two years ago, and land in its Monterey estate is rented to local farmers growing asparagus, corn and other produce. Wente said the family is also removing some varietals, including Cabernet Sauvignon.
“The cattle industry is booming right now,” Wente said. “Meat prices are going up.”
Nick Fink, who leads Constellation Brands, the company behind the Prisoner and Kim Crawford wine labels, said he believes the industry may have hit its bottom. “Going forward, this thing has kind of found bottom,” Fink said after a recent visit to California vineyards.