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Wine grape updates
Inventory overhang persists as demand stays soft.
Wine grape markets remain in a prolonged downturn heading into the 2026 season. Vineyard conditions and water availability are improved, but structural oversupply, elevated inventories, and weakening demand continue to pressure grape prices and winery cash flow. Elevated bulk wine inventories in particular continue to weigh on market conditions, limiting near term rebalancing despite recent production adjustments. Warm March weather across AgWest’s territory accelerated vine development well ahead of normal timelines, complicating yield and harvest outlooks.
At the winery level, revenue increased in 2025 despite lower consumption. Market research firm BW166 reports that total U.S. wine sales reached more than $115 billion in 2025, up 2.5% from the prior year, despite a 2.4% decline in total case volumes. This reflects gains driven by premiumization (consumers trading up to higher-priced bottles) and price inflation. Similarly, DtC shipment values rose for the first time in a year even as volume remained down, mirroring the broader industry pattern.
The outlook remains mixed as more acreage is removed and wine volume adjusts to consumption patterns. There is optimism longer term with more meaningful improvement potentially emerging in late 2027 and 2028.
Profitability
March 11, 2026Wine: Slightly unprofitable - Bearish 12-month outlook
Wine grapes: Unprofitable - Neutral 12-month outlook
Wine demand continues to soften and pressure the industry, particularly in the lower- to mid-range segments.
While the 2025 wine grape crop will come in smaller than average, excess wine inventories will continue to limit grape demand.
The U.S. is the fourth largest New World (non-European) producer globally, it is the largest consumer, importing a third of its domestic supply. Key foreign suppliers include Italy, Canada, France, Australia, Chile and New Zealand. The U.S. exports 8% of its production, with about 50% split between the United Kingdom and Canada.
Wine production, exports and imports
Source: Wine Institute. U.S. Census Bureau.
Tariff tracker - Tariff rates applied to U.S. trade partners are consistenly updated to reflect policy changes. The World Trade Organization (WTO) tracks duties and tariffs on wine. For your convenience, the following link will take you to tariff data for the United Kingdom. Wine is currently exempt from tariffs for Canada under the United States-Mexico-Canada Agreement (USMCA), but please refer to the U.S. Trade Representative website for up-to-date information. WTO also tracks rates for wine imports to the U.S. Please consult with a trade lawyer or professional for detailed and up-to-date insights on tariff rates and their application to wine.
For guidance on interpreting duty and tariff rates, please refer to our Tariff Guide.
Wine grape updates
Inventory overhang persists as demand stays soft.
Wine grape markets remain in a prolonged downturn heading into the 2026 season. Vineyard conditions and water availability are improved, but structural oversupply, elevated inventories, and weakening demand continue to pressure grape prices and winery cash flow. Elevated bulk wine inventories in particular continue to weigh on market conditions, limiting near term rebalancing despite recent production adjustments. Warm March weather across AgWest’s territory accelerated vine development well ahead of normal timelines, complicating yield and harvest outlooks.
At the winery level, revenue increased in 2025 despite lower consumption. Market research firm BW166 reports that total U.S. wine sales reached more than $115 billion in 2025, up 2.5% from the prior year, despite a 2.4% decline in total case volumes. This reflects gains driven by premiumization (consumers trading up to higher-priced bottles) and price inflation. Similarly, DtC shipment values rose for the first time in a year even as volume remained down, mirroring the broader industry pattern.
The outlook remains mixed as more acreage is removed and wine volume adjusts to consumption patterns. There is optimism longer term with more meaningful improvement potentially emerging in late 2027 and 2028.
Profitability
March 11, 2026Wine: Slightly unprofitable - Bearish 12-month outlook
Wine grapes: Unprofitable - Neutral 12-month outlook
Wine demand continues to soften and pressure the industry, particularly in the lower- to mid-range segments.
While the 2025 wine grape crop will come in smaller than average, excess wine inventories will continue to limit grape demand.
The U.S. is the fourth largest New World (non-European) producer globally, it is the largest consumer, importing a third of its domestic supply. Key foreign suppliers include Italy, Canada, France, Australia, Chile and New Zealand. The U.S. exports 8% of its production, with about 50% split between the United Kingdom and Canada.
Wine production, exports and imports
Source: Wine Institute. U.S. Census Bureau.
Tariff tracker - Tariff rates applied to U.S. trade partners are consistenly updated to reflect policy changes. The World Trade Organization (WTO) tracks duties and tariffs on wine. For your convenience, the following link will take you to tariff data for the United Kingdom. Wine is currently exempt from tariffs for Canada under the United States-Mexico-Canada Agreement (USMCA), but please refer to the U.S. Trade Representative website for up-to-date information. WTO also tracks rates for wine imports to the U.S. Please consult with a trade lawyer or professional for detailed and up-to-date insights on tariff rates and their application to wine.
For guidance on interpreting duty and tariff rates, please refer to our Tariff Guide.
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