Why U.S. Wine Demand is Down

The U.S. wine industry is changing.

Let’s take a look.

6 Facts About Wine

1. U.S. winemakers used to depend on Canada:

2. During 2025, Canadian demand for U.S. wine plunged:

As several Canadian provinces, including Quebec and Ontario, pulled U.S. wine from their store shelves, sales went way down. Documenting the drop, during October 2025 U.S. wine exports to Canda decreased by 84% from a year earlier. Other numbers indicate that our bilateral wine trade sunk 91% from March to July compared to the previous year. Probably compounding and reflecting winemakers’ reduced demand, only 6 U.S. wineries will attend the Vancouver International Wine Festival during March.

3. In addition, Americans are drinking less:

According to recent Gallup poll, 54% of Americans said they consumed alcohol. Going back to 1997, the number has steadily sunk from 60% saying they were alcohol drinkers.

Describing less demand from aging baby boomers, the Economist said they have been replaced by Millennials and Gen Z that drink across multiple categories and are drinking less. Further documenting shrunk demand, Australian 18- to 24-year-olds halved their wine drinking from 2010-2023.

4. More than ever before, wine has competition from other drinks.

Wine competes against substitute products that include beer, cocktails, NA drinks, and cannabis.

5. Correspondingly we are spending less:

6. The world will be drinking less:

Among the world’s fastest growing countries, Muslim populations abstain from alcohol.

Our Bottom Line: The Supply Side

Suffering from the challenges of tariffs, culture, generational tastes, and substitutes, the supply side has experienced a glut with some vineyards throwing out newly harvested grapes.

Although there could be more pricey wine demand from the top 1%, only 7% of participating vineyards said 2025 was one of their best years:

My sources and more: For facts about declining demand for U.S. wine, the NY Times, here and here, had a vast array of facts while the Detroit News had the focus on Canada’s wine demand. In addition, this NPR article had more facts and more analysis as did The Economist and this State of the Wine Industry Report from the Silicon Valley Bank. And finally, in the past, this econlife post focused on who pays the wine tariff.