The U.S. wine market has never been worth more—and yet, it has never appeared more fragile. This is the clear, and in many ways stark, picture emerging from the 2026 BMO Wine Market Report, one of the most authoritative analyses of the American wine industry. The report goes beyond headline figures, describing a sector at a turning point: higher economic value, declining consumption, weakening consumer loyalty and a loss of cultural centrality that is reshaping the entire U.S. wine landscape.
In 2025, Americans spent more than $115 billion on wine, up 3% year‑on‑year. Behind this growth, however, lies a very different reality: overall volumes continue to decline, and wine consumption in the U.S. shows signs of a structural downturn.
According to the report—produced by BMO Wine & Spirits Group in collaboration with Baker Tilly, bw166, Gomberg Fredrikson & Associates and WineBusiness Analytics—the industry has entered what is openly described as a “reset” phase, forcing producers to rethink pricing, distribution, packaging and commercial strategies in order to remain competitive.
Higher Spending, Lower Consumption
The core paradox is simple: Americans are spending more, but drinking less wine. Market value is largely sustained by price increases and inflation, while volumes continue to fall. In 2025, the U.S. market dropped to 362 million 9‑litre cases, down 4% year‑on‑year and more than 12% compared to 2018.
California—the backbone of U.S. wine production—has also sharply reduced supply. Over the past decade, volumes from the state have fallen by nearly 25%, driven by vineyard removals, historically low harvests and significantly weaker demand.
As Adam Beak, Managing Director and Head of Wine & Spirits at BMO, explains:
“What we are seeing is not a pause, but a reset. Higher prices are sustaining market value while masking a structural decline in consumption—fewer people are drinking wine, and they are doing so less frequently.”
U.S. Wine Market: the End of the Premiumisation Cycle
For more than two decades, U.S. wine growth was fuelled by premiumisation: fewer bottles sold at increasingly higher prices. That model, supported by Baby Boomer purchasing power and a strong post‑2008 recovery, now appears to be reaching its limits.
Between 2016 and 2025, the Baby Boomer population declined by 11.7%, while their weekly wine consumption dropped by 37.4%. At the same time, Millennials and Gen Z have not developed the same cultural relationship with wine.
Weekly wine drinkers fell from 19.4% of U.S. adults in 2018 to 16% in 2025, while frequent drinkers declined from 37 million in 2012 to 24 million in 2025.
New Generations, New Challenges
The report highlights a critical disconnect with younger consumers. While 45% of drinkers aged 21–28 say they would like to drink more wine—and Millennials now represent the largest share of U.S. wine consumers—wine is widely perceived as expensive, complex and less immediate than alternatives such as ready‑to‑drink beverages, hard seltzers and canned cocktails.
Health considerations further weigh on consumption, alongside the growth of low‑ and no‑alcohol products, shifting dietary habits and the impact of GLP‑1 weight‑management drugs, which appear to reduce alcohol desire. Misperceptions also persist: more than half of U.S. consumers aged 21–39 incorrectly believe that sugar is added to all wines.
Distribution Under Pressure and DTC Slows
Even direct‑to‑consumer (DTC)—long a growth engine for premium wineries—is slowing. DTC shipments fell 15% in volume to 5.4 million cases, while value declined 6% to $3.7 billion, reflecting higher logistics costs and reduced discretionary spending.
The U.S. distribution system is also under strain. Nearly one‑quarter of wineries lost their primary distributor in the past year, accelerating a shift in which wholesalers increasingly act as logistics platforms rather than true sales drivers. The 2025 exit of RNDC from California exemplifies this trend.
U.S. Wine Market: Where Growth Still Exists
While traditional wine struggles, flavoured wines grew 12% in 2025, surpassing 35 million cases, even as sparkling wine volumes declined 3%. Private‑label wines are also expanding rapidly, with 34% of U.S. wineries now producing for major retailers and 43% planning further expansion in this segment.
The report concludes that future growth will require more accessible pricing, clearer communication, stronger engagement with younger consumers and smarter use of technology.
A Market in Transition
Despite the challenges, sentiment remains cautiously optimistic: 71% of wineries expect stabilisation or recovery within three years, while 38% believe a turnaround could arrive sooner.
The message of the 2026 BMO Wine Market Report is clear: the era of automatic growth is over. Premiumisation alone is no longer sufficient, competition across beverage categories is intensifying, and wine must once again become desirable to a generation with endless alternatives.
The future of wine in the U.S. will depend not just on selling bottles, but on rebuilding cultural relevance in a profoundly changed market.
