The U.S. alcohol industry is facing a striking imbalance: wine producers may soon struggle to find grapes, while whiskey distilleries are drowning in inventory.
According to Jon Moramarco, founder of bw166, these opposing trends reflect deeper structural shifts in consumer behavior, production planning, and economic pressure.
In California, the heart of American wine production, Moramarco warns that wineries could face a grape shortage as early as mid-2026. The cause is counterintuitive. Despite a surplus last year, nearly 50% of wine grapes were never harvested, as growers responded to weak demand and low prices by leaving fruit on the vine.
Moramarco estimates that California’s latest harvest will total approximately 2.25 million tons, pending official confirmation. This would make it the smallest crop in nearly half a century, down 24% from 2024 and dramatically lower than peak production years such as 2018. While this reduction could help correct years of oversupply, it also creates a fragile supply situation—especially if growers continue to cut back on vineyard maintenance.
At the opposite end of the spectrum lies the American whiskey industry, which is suffering from extreme overproduction. Moramarco notes that distillers misread market signals during the pandemic-era boom. In 2022 alone, the industry filled twice as many barrels as in 2005, only to face slowing demand shortly thereafter.
The result: whiskey stockpiles equivalent to 13 years of production. Some major players have already hit the brakes. Jim Beam has announced a one-year production halt, while Brown-Forman has exited the barrel business entirely. As Moramarco puts it, “This will take a few years to sort out. Everyone has excess inventory. The positive side is that the whiskey doesn’t spoil.”
Market data confirms the slowdown. Shipments of U.S. whiskey to distributors fell by 6.5% in 2025, while imported whiskey shipments declined by just 1.4%, despite ongoing tariff pressures. This suggests growing consumer selectivity rather than a complete category collapse.
At a macro level, total U.S. consumer spending on alcohol continues to rise modestly—about 4%, according to Bureau of Economic Analysis data—but volumes are falling across nearly every category. Alcohol still represents one-sixth of retail food and beverage revenue and over 25% of spending in full-service restaurants, yet Americans are drinking less than ever.
Average weekly alcohol consumption per adult dropped from 15 servings in 2020 to 13.5 last year, the lowest level since the 1960s. While population growth previously masked declining per-capita consumption, the last five years have seen the steepest drop on record.
Moramarco draws parallels with the 1980s, when both wine and spirits struggled before rebounding in the 1990s with baby boomer demand. Today’s young adults, he argues, face different realities: stagnant wages, soaring housing costs, and historic levels of student debt. As a result, they drink less—and buy differently.
This shift is reshaping retail. Large wineries are struggling to move mass-produced wines through traditional supermarkets, while chains such as Trader Joe’s and Grocery Outlet thrive on private-label, low-cost wines. Some younger consumers, constrained by budgets, are prioritising price over brand loyalty.
Ultimately, Moramarco believes the implications go beyond alcohol. “Newer generations may not be able to match their parents’ spending, and that will slow down the economy,” he warns. Wine shortages and whiskey gluts may be symptoms—but the underlying issue is a fundamental reset in American consumption.
Source: Vinetur