U.S. Wine Sales Hit Record Value as Drinking Falls

Americans spent more than $115 billion on wine in 2025, a record that masks a deeper problem for the industry: they drank less of it.

That is the central finding of the 2026 BMO Wine Market Report, released Tuesday, which says U.S. wine market value rose 3% last year even as total volume fell for another year. The report describes a market being pulled in two directions at once, with higher prices lifting sales totals while weaker consumption, excess inventory and shifting distribution patterns continue to pressure wineries, growers and wholesalers.

The report said the U.S. wine market has entered a reset rather than a pause. Adam Beak, managing director and head of wine and spirits at BMO, said higher prices are keeping overall value elevated but are also obscuring a structural decline in drinking. “Fewer people are drinking wine, and they’re doing it less often,” he said in the report. “At the same time, supply is shrinking, distribution is changing, and direct-to-consumer isn’t growing the way it once did.”

The numbers point to a market that is still large but increasingly fragile. Total consumer spending on wine topped $115 billion in 2025, but volume fell 4% to 362 million cases, according to the report. That leaves the industry with more revenue on paper but fewer bottles moving through stores, restaurants and direct sales channels.

California, which remains the center of U.S. wine production, is sending much less wine into the market than it did a decade ago. The report said wine entering the U.S. market from California has fallen by nearly 25% in less than 10 years. That decline reflects vineyard pullbacks, a historically small harvest and a broader effort by producers to match supply with softer demand.

The report also found that direct-to-consumer sales, long seen as one of the most reliable growth engines for wineries, are under strain. Winery shipments through that channel fell 15% in volume to 5.4 million cases in 2025, while shipment value declined 6% to $3.7 billion. Rising shipping costs and weaker discretionary spending were among the reasons cited.

Distribution is also changing. Nearly one quarter of wineries surveyed said they lost a primary distributor, a sign of how unstable the wholesale side of the business has become. In some cases, wineries are taking on more of their own selling and treating wholesalers less as growth partners than as fulfillment channels.

The report said category performance is becoming more fragmented as consumers shift toward different styles and formats. Flavored wines grew 12% in 2025, while sparkling wine volumes fell 3%. Private-label and retailer-exclusive wines are gaining ground as club stores and large retailers expand their role in the market.

The survey behind the report suggests that many wineries still expect improvement, even if they do not expect a quick return to past conditions. Seventy-one percent of wineries surveyed said they believe the U.S. wine industry will stabilize or rebound within three years, and 38% said they think recovery could come sooner.

Still, the report makes clear that the industry’s old growth model is under pressure from several sides at once. The number of wineries has risen sharply over the past decade even as total consumption has fallen. High-frequency drinkers have declined over time, and younger consumers are not replacing them at the same pace or volume.

The report said millennials are now the largest share of wine drinkers, but many find the category confusing or too expensive compared with other beverages. Gen Z consumers are even more price-sensitive. At the same time, baby boomers, once one of wine’s most dependable customer groups, are drinking less as they age.

Competition from other drinks is adding to the pressure. Ready-to-drink cocktails, flavored alcoholic beverages and cannabis-infused products have all taken shelf space and consumer attention from traditional wine categories. The report also pointed to health concerns and changing attitudes toward alcohol as factors shaping demand.

BMO said this year’s report was expanded through its partnership with Baker Tilly, WineBusiness Analytics and bw166, giving it a broader mix of economic data and winery survey results. The survey was conducted between Jan. 26 and March 2 and weighted to reflect wineries of different sizes, regions and price points.

For wineries trying to navigate the current market, the report suggests that survival will depend less on waiting for demand to return than on adjusting to a new reality: smaller harvests, tighter margins, more selective consumers and a distribution system that no longer works as it once did.

“Wineries that succeed in this next phase will be the ones that adapt how they price, package and go to market,” Beak said in the report.