Not Whining About the Wine Industry

(Maybe just a little)

By Michael Dorf | Oct 20, 2026

I’m writing this from Sicily, where the vineyards sit in the shadow of Mt. Etna. Over the centuries, more than once, the volcano has buried them under lava. The Sicilians replant and keep making great wine anyway. Nothing builds perspective on a bad quarter like a neighbor who occasionally erupts.

Back on mainland Europe, and especially in the United States, the wine business is having its own eruption. Over the last few years consumption has dropped sharply, production has shrunk, and we’ve seen bankruptcies, consolidations and fire sales. It’s a perfect storm: weak demand, years of overplanting, climate change, and a set of rules written right after Prohibition that are still running the show. I’d love to blame Trump for this one. I won’t. (Not yet, anyway.)

A Front-Row Seat

At City Winery we’re lucky to have a front-row seat, and some days backstage access to see what is going on. For 19 vintages we’ve bought grapes straight from vineyards in California, Oregon, Washington State and New York. We added a second harvest by bringing fruit up from Argentina and Chile, whose harvest falls in our spring. Basically, we make wine on two calendars and sleep on neither.

Along the way I’ve made real friends among the people who farm this land. They sold us Chardonnay at $3,500 a ton and Pinot Noir at $7,000 a ton--from beautiful vineyards in places that look like the label. For 16 years prices only went up. We spread our buying across more and more sites, half out of curiosity and half as insurance. If one vineyard burned, got smoke taint, drowned in mildew or just had a bad year, we had others. It’s agriculture, after all. No amount of biodynamic farming, sensor tech or AI can talk Mother Nature out of a mood.

Then the Fruit Fell

About two years ago prices started slipping. This past harvest, sadly, many growers offered deep discounts, and some were close to giving fruit away. (”Fruit,” by the way, is what us cool industry folk call grapes. Use it at a dinner party and watch people lean in.)

Plenty of vineyards were “dropping fruit.” That means cutting the bunches off and letting them rot on the ground, because picking them, fermenting them and aging them in real barrels (the really expensive part) costs more than the wine will sell for. Picture a farmer paying to throw away what he grew all year. That’s where we are.

And yes, Trump’s immigration policies have made it much harder and more expensive to find people willing to do the backbreaking work of harvesting by hand. It’s one of many rising costs. (See? I really tried. I lasted three paragraphs.)

Everything Must Go

I’ve been offered vineyards and wineries for sale at 50% or more of what they were worth three years ago. Public companies and funds that own wineries are dumping assets. Restaurants and retailers are cutting inventory, selling what they have and barely buying new vintages, which squeezes winery cash flow even harder. It’s a traffic jam where every car is waiting on the one in front of it.

And it’s hard to see demand coming back soon. GLP-1s are shrinking appetites, for wine too. Wellness culture has turned a glass of red from a heart-healthy ritual into a moral failing. THC drinks are taking a share of the evening, and the headlines on drinking get gloomier every month. Very few spirits categories are growing. The buzz around tequila, gin, single malts and craft cocktails is fading. Dry January has quietly become Dry Winter. After decades of steady growth, picture what a 25% drop in consumption does to an industry built on the assumption that next year will always be bigger.

The Profits Are in the Popcorn

City Winery has gone from 70% wine and 30% beer and spirits to 45% wine and 55% beer and spirits in two decades. That’s still far more wine than most entertainment venues sell and thank goodness we carry a mutual fund of beverages for people coming to a show. As the saying goes, the profits are in the popcorn. Our model has always counted on food and drink to pay the bills, with the music bringing people in the door.

We can adjust our winemaking, and we are. We’re taking reasonable advantage of cheaper raw materials and, with bittersweet empathy for our grower friends, getting great deals on fruit. We’re the lucky winery: we aren’t tied to one 100-acre parcel, so we can roam and be nomadic to find the best grapes this year.

A 1933 Rulebook for a 2026 Problem

Here’s the part that deserves more than a shrug. After Prohibition was repealed in 1933, in the middle of the Depression, states passed “tied-house” laws. Their purpose was good: stop big producers from owning the local saloons and pushing their product on a captive audience. That’s how we got the three-tier system of producer, distributor and retailer, with walls between each tier.

Nearly a century later, the unintended result is a bit absurd. Distribution has consolidated into a handful of giants with enormous leverage, while the outlets where people actually drink (restaurants, bars, venues, shops) are largely barred from taking investment or support from the producers whose wine they pour. The people with the most at stake in getting a bottle onto your table are legally kept out of the room where that happens.

Of course, there are workarounds if you’re big enough. Look at the massive sponsorship deals at stadiums and arenas. Milwaukee’s ballpark carried the Miller name for two decades, and in St. Louis the Busch family owned the Cardinals for decades and put their name on the stadium. Beer and baseball grew up together, financed together and poured together. (GO BREWERS!) That kind of partnership is open to brewing dynasties and closed to a mid-sized winery and the venue down the street. These laws need updating for this century and the economics we actually live in.

Come Get Some Value

We’re lucky, maybe even blessed. Our combination of live music that can’t be copied, real people serving and high-quality food and wine lets us keep growing while others shrink. And the downturn means we can source better fruit at better prices and pass that value straight to our guests. At least the ones still drinking wine.

So come see a show. Come get some value in our glasses. The farmers will thank you, and so will I.