The supply adjustment is due to a 'historic drop' in consumption. Canada was the largest foreign market for California wine before retaliatory boycotts

California growers have removed more than 100,000 acres of healthy vineyards in recent years, according to industry estimates. In the last two, 1.2 million tons of wine grapes have reportedly been left to rot on the vine. This may seem counterintuitive, especially with wildfires recently threatening wine-producing regions elsewhere, including the Okanagan Valley and France’s famed Bordeaux area. The reason for the “explosion” of removal isn’t disease but demand, and the issue isn’t unique to California.

Facing low sales and a “historic drop in wine consumption,” the industry is experiencing a reset, experts told National Post. In California, which produces roughly 80 per cent of U.S. wine, the Canada-United States trade war and the resulting provincial bans on American alcohol have exacerbated the situation.

“The lack of the Canadian market isn’t responsible for 100,000 acres of California wine grapes disappearing in the last five years, but it makes things worse,” says Mike Veseth, an economist who specializes in global wine markets and author of The Wine Economist.

Vineyards are disappearing around the world, including France, Italy, Spain, Australia, Chile and Argentina, adds Veseth. “It’s not just California.” The supply adjustment is relatively recent, but the decline in consumption is not — though not every year and not everywhere. “As we look back at the numbers, it’s clear that globally, this has been going on for 20 years.”

Canada was the largest foreign export market for California wine before retaliatory boycotts began in early 2025. Provincial bans on U.S. alcohol are having “a big effect,” says Robin Goldstein, deputy director of the Robert Mondavi Institute Center for Wine Economics at UC Davis. “Canada also makes great wine, but it’s a limited amount of wine from a limited number of places because of climate, so we export a huge amount to Canada, not just from California, but the Pacific Northwest and some from the East Coast.”

Identity plays a major role in influencing our choices as consumers, says Antonia Mantonakis, a professor of marketing and consumer psychology and a fellow at the Cool Climate Oenology and Viticulture Institute at Brock University in St. Catharines, Ont. “The whole trade war has really highlighted our identity as Canadians, but it’s not just our identity as Canadians that influences our choices. It’s what we call a dissociative identity. So America, more than ever, has become a dissociative identity for us as Canadians.”

As a result, Ontarians aren’t simply more likely to buy wine from Niagara or Prince Edward County, for instance. “It’s that they’re less likely to buy California wine,” says Mantonakis.

Last year alone, growers reportedly removed more than 38,000 acres of wine grapes California-wide — amounting to seven per cent of the state’s acreage. Another 40,000 acres are expected to come out this year, according to Ag Alert, a California Farm Bureau publication. As American business magazine Inc. reports, “That would push three-year removals past 100,000 acres.”

Uprooting vineyards is expensive, and farmers need a business plan if they’re going to use the land to plant something else. In an economically difficult situation, it’s much more common not to farm that year, says Goldstein. “You have to have a good reason to (remove the vines) rather than to just let them sit there.” In 2024, an estimated 400,000 tons of grapes were reportedly left to do just that. A record at the time, that number more than doubled in 2025, when industry estimates suggest that roughly 820,000 tons of wine grapes went unharvested.

Some wineries aren’t buying grapes because they have so much wine from previous harvests in the tanks, says Veseth. He estimates that in his home state of Washington, roughly half of the vines have disappeared since before the pandemic. “The ones that aren’t pulled out, we know that many of those weren’t harvested the last few years. So they either left the grapes on the vine because it doesn’t pay to harvest grapes if you can’t sell them or they hired workers to come in and just drop the grapes to the ground.”

The wine business is like any other, says Mantonakis. If the cost of producing grapes exceeds what farmers can sell them for, some might remove their vineyards and plant something else. The opposite was happening when she moved to the Niagara region 20 years ago, as farmers tore out peach and plum orchards to make room for more profitable wine grapes.

Goldstein highlights that in California, the costs of running a vineyard are extraordinarily high, and he doesn’t see the current situation as cause for panic. “I don’t think that the consumption is just going to continue to linearly drop to the floor and everyone’s going to lose their business.”

He notes that humans have been making wine for thousands of years, and in North America, consumption fluctuates every few decades. Mantonakis shares this sentiment: “Across cultures, across continents, across generations, wine is an important part of history.”

It can be challenging for wineries to differentiate themselves in a competitive market, says Goldstein. Over the past five to 10 years, wine clubs have been a successful model, in which small wineries have a hospitality facility where people gather. “It’s starting to spread around the world, this idea of a wine club and wine tourism, but it really started in California. And so I think some of the wineries that are able to buck this trend are the ones who are also branching out in different ways like that.”

Mantonakis also emphasizes the importance of finding new ways to connect with consumers. “We need to stop selling wine like it’s 1999,” she says. “Wine is still sold like it’s going to be an investment.”

Viticulture (grape growing) and oenology (winemaking) are established sciences, Mantonakis underscores. The missing piece is the consumer mindset. “We’re just like, ‘Oh, it’s demand collapse. We should pull our vines.’ Is that really what’s happening, or for Gen Z, for example, are we not understanding what they want because we’ve never really asked them, or we’ve never really observed them, or we’ve never really done experiments?”

The industry understands viticulture and oenology, but not the behavioural signs. “We need to put more resources, more attention, more research, more investment in that other end of the value chain.”

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