The California wine industry is grappling with a severe downturn, leading to drastic measures such as vineyard destruction and widespread closures. Jason Smith, CEO of Valley Farm Management, recently sold all his land and burned his vineyards, citing a complete lack of profitability.

"There’s literally no way for me to make money," Smith stated. The 57-year-old, whose company has been in the wine business since the 1970s, indicated he will need to pursue a new career. Smith sold his primary vineyard to Jackson Family Wines, with other land parcels going to private equity firms and equipment sold for cash.

This extreme action reflects a broader crisis in the industry. Wine sales have fallen to their lowest point in over two decades, coinciding with a general decline in alcohol consumption among Americans. A Gallup poll from October 2025 indicated that only 54% of U.S. adults consume alcohol, the lowest percentage recorded since 1939.

California, responsible for over 80% of the nation's wine production, has seen significant shifts. The industry experienced a boom in pinot noir following the 2004 film "Sideways." Mark Williams, founder of Arista Winery, which closed in 2024, recalled the surge in demand for pinot noir after the film's release. Smith also noted his winery's peak profits occurred in the years following "Sideways," though he recalled a subsequent drop in merlot sales after the film's protagonist disparaged the varietal.

However, overall demand has plummeted. Pinot noir production alone has dropped 30% since 2021. Smith lamented, "We were so pinot noir-centric. And then there just wasn’t the demand."

The situation is dire, with hundreds more wineries predicted to close within the next two years. Steve Lohr, president of J. Lohr Vineyards & Wines, described the current climate as unprecedented in his 54 years in the business, calling it a period of "change and turmoil and chaos."

In late 2025, the California Association of Winegrowers reported that production had reached a 30-year low, with an estimated 800,000 tons of grapes unpicked or unsold. On the day Smith burned his vineyards, he observed a neighboring winery removing grapes from the ground.

While some businesses are scaling back, they express hope for survival. Michael Meluskey, general manager of Au Bon Climat winery in Santa Barbara, is reducing production due to decreased demand but remains optimistic, stating, "People love wine, they love wine with food. It’s like any business that goes through cycles."