The contraction of the wine grape industry has deepened.

The total amount of wine grapes yielded 150,000 tons in 2024, a 5% decline over the prior year and the lowest yield since 2011, according to a recent report from the Washington State Wine Commission.

Wine grape acreage fell to 50,000 acres, its lowest level since 2013. And for the second straight year, the state reported 10 fewer licensed wineries in operation.

It’s a state of affairs that industry analysts say won’t be changing anytime soon.

“After 30 years of moving up and to the right, it is foreign to see wine industry metrics flatten out,” said Rob McMillan, executive vice president of Silicon Valley Bank (SVB) in the bank’s annual State of the U.S. Wine Industry report. “This isn’t like any era before, so the solution will not be straightforward. We lack a historical solution set to emulate. There is hard work ahead, but I do not doubt that creativity, something we have in abundance, will provide solutions.”

The 2024 report

Wine growers had a rough start to 2024.

Almost all growing regions were hit by severe cold in January 2024, with high elevation vineyards losing nearly all primary and secondary bud growth.

Despite the loss, more buds than expected pushed through on vines, leading to a high-quality vintage, according to the wine commission. And, like in 2023, growers saw the average price per ton of grapes climb up to $1,621, with merlot fetching the highest prices at $2,595 per ton.

“Our harvest weather was ideal, just beautiful,” said Kristina Kelley, the commission’s executive director, in a statement. “Overall, growers and winemakers alike are thrilled about the quality of both red and white varieties.”

The commission published its annual crush report on the 2024 vintage at the end of March 2025 using data from growers and wineries across the state.

Cabernet sauvignon continued as the clear leader in red varieties, with 40,589 tons. Syrah was in second at 16,161 tons and merlot third with 12,505 tons.

Riesling yielded 22,168 tons followed by chardonnay at 21,552 tons. Sauvignon blanc was a distant third with 9,543 tons.

Reds made up 55% of the year’s harvest, a decline from prior years. White varieties not only were a higher percentage of the vintage but saw its crushed tonnage increase slightly overall.

After the severe cold in early 2024, most other milestones for the growing season were only slightly above or below historical averages, according to the wine commission.

Bud break and bloom came earlier but only by days. Veraison was several days behind historical averages, along with the start of harvest.

Berry and cluster size were slightly below average to average, as were yields. Brix and acids were both above average. Other environmental pressures, including disease and pests, were moderate, with growers noting mildew challenges and more mealy bugs.

In more recent on-the-ground developments, Washington state’s bud break in 2025 came in at almost exactly the same average based on historic records, according to industry reports. But close on the heels of that news was yet another challenge: a drought declaration affecting much of Washington wine country in the Yakima Valley and into the Mid-Columbia.

Washington wine grape growers and vintners are facing a multiyear contraction of the industry due to a number of factors, including oversupply, the loss of a wine-loving generation to one less inclined to imbibe, and climate and weather pressures.

| Courtesy of AFTER95 / Washington State Wine Commission

Changing market, tastes

The wine industry, both in Washington and nationwide, has struggled in recent years, and that continued in 2024.

Ste. Michelle Wine Estates, the state’s largest wine producer, closed its tasting rooms and wine clubs for two of its brands at the end of 2024, according to Northwest Wine Report. That followed the winery announcing in 2023 it would significantly cut its grape contracts through 2028.

Hamilton Cellars, one of the oldest wineries in the Red Mountain American Viticultural Area (AVA), was put on the market for $3 million in mid-2024 after the death of its remaining founders. It was purchased by a Seattle-based property management company in April 2025. The company does not plan to operate a wine brand and is currently seeking a tenant to lease the winery and tasting room, according to a release.

Global winemaker Duckhorn Portfolio recently announced that it would shut down its Washington state-based Canvasback label, the latest in a series of large wine companies struggling to find success in the state, according to Northwest Wine Report.

“Washington wine’s single biggest problem is that most of its wines are produced in microscopic quantities and have little to no national presence,” wrote Northwest Wine Report’s Sean P. Sullivan recently. “This has created a chicken-and-egg problem. The state can’t grow awareness without more people trying the wines, but people can’t try the wines because production is so small.”

Planted acreage in Washington is exceeding current demand, the State of the U.S. Wine Industry 2025 report noted.

U.S. table wine consumption in 2023, the most recent data available, reached its lowest level since 2011 at 759 million gallons, according to the Wine Institute.

The State of the U.S. Wine Industry report also said that while the industry has seen periodic declines in the past tied to economic downturns or overplanting, the current steep drop is generational: The wine-loving and aging Baby Boomers are becoming an increasingly smaller part of the customer base and younger generations tend to be teetotalers. And it’s unclear how the U.S. Surgeon General’s warning in January 2025 that alcohol increases cancer risk and calling for new health labels on alcoholic beverages will affect overall consumption.

“As we continue to experience consolidation, changing consumer preferences and shifts in market demand, we are collaborating with our industry partners both locally and globally to tackle these challenges and capitalize on opportunities in the current market,” Kelley said in a statement to the Tri-Cities Area Journal of Business    this Focus edition. “We must unite our efforts to attract new consumers into our communities. There is a lot of work ahead of us to ensure we are welcoming these emerging consumers into wine.” 

An uncertain 2025

The current once-in-a-lifetime market and cultural shifts are much better understood than other challenges on the minds of wine grape growers.

The SVB Wine Industry Sentiment Index puts industry sentiment at a 10-year low. The economy is a major factor, as is consumer demand, but so are questions around labor.

“Talk of deportations of farmworkers by the (Trump) administration isn’t helping the labor component of the index,” McMillan wrote in his report.

A rapidly shifting trade landscape along with a flurry of lawsuits in the wake of the tariffs implemented by the Trump administration continue to raise more questions than answers.

“The wine market pie was already shrinking, of course, so tariffs just make things worse. How it will turn out, and if anyone will be a winner, is still not clear,” wrote Mike Veseth of The Wine Economist.