Beyond the Peak of Excess
by Steve Fredricks
As we turned the calendars to 2026, the landscape felt familiar: excess inventories, a scarcity of buyers, and a relentless stream of negative headlines that keep the wine markets entrenched in a perception of "peak of excess." While it is true that some inventories remain swollen and activity in the bulk wine and grape markets is sluggish, significant actions (and reactions) to correct this oversupply have been underway behind the scenes for years. These actions are beginning to come to the forefront in the form of vineyard removals and, unfortunately, the closing of wineries and other associated businesses in the industry.
The combination of unsold tonnage and strategic vineyard removals has limited both recent crop sizes and reduced future supply potential. The 2024 crop, totaling 2.864 million tons, was the smallest in 20 years; 2025 is likely to be dramatically smaller. However, projecting actual tons crushed for 2025 is particularly challenging due to the high volume of uncontracted fruit, mothballed vineyards, quality rejections, and extensive acreage removals, leading to a wider range of forecasts than usual. Our grape brokers—with "boots on the ground" throughout the state—project the 2025 crop to fall between 2.0 and 2.4 million tons. This would mark potentially the smallest harvest since the mid-1990s.
Our projections for 470,000 bearing acres in 2025 were confirmed by the Land IQ survey in November. Out of necessity, we expect another 50,000 acres to be removed or mothballed in 2026 unless growers secure early contracts. With these additional removals, a 2026 crop size of roughly 2.75 million tons would be expected, assuming long-term average yields. However, with many vineyards recently mothballed or otherwise minimally farmed to reduce yields and costs, there could be considerably lower potential yields.
Though we may feel stuck in a period of excess, the results from difficult decisions made over the last two years to reduce inventory are continuing to work through the three-tier system. On the supply side, we are shifting away from oversupply, even if the spot bulk wine and grape markets have yet to fully realize or be impacted by it.
While this has been a painful but necessary correction, the large number of acres removed could swing the pendulum back towards shortage at some point in the next couple of years, particularly if consumer sales stabilize. Removals out of necessity compared to forward thinking strategy could lead to a turbulent transition, and the abundance of choice a buyer has had recently may dissipate. If significant removals continue to happen, and yields are smaller than historical averages this year, the 2026 crop could be a bellwether for all markets shifting further away from excess and towards shortage. As we move through the year, we will monitor and analyze bulk market supply and demand indicators as they can elicit data points of looming change. This issue of the Turrentine Market Update is centered more on the early bulk wine market as the grape markets were reviewed in early November.
- Bulk Market 3
- Cabernet Sauvignon 4
- Chardonnay 4
- Sauvignon Blanc 5
- Pinot Noir 5
- Conclusion 5
- Crop Contest 6
- Turrentine on the Road 6