California’s wine industry is facing significant challenges as several major producers announce facility closures and job cuts. Jackson Family Wines has discontinued production at its Carneros Hill facility in Sonoma, resulting in the layoffs of over a dozen employees. This strategic move, confirmed by the company, stems from the site’s underutilization and the need to consolidate operations.
With Jackson Family Wines ranked as the sixth-largest wine producer in the United States, the impact of the closure is notable. The company, which owns the well-known Kendall-Jackson label and approximately 40 other brands, has been producing around 6 million cases of wine annually, primarily sourced from California.
This closure follows similar announcements from other industry giants. Gallo, recognized as the largest winemaker globally, revealed it would shut down its Ranch Winery in St. Helena, eliminating nearly 100 positions. The company cited market dynamics and evolving consumer preferences as contributing factors to these reductions. Gallo is also downscaling operations at various other facilities, including the Louis M. Martini Winery and J Vineyards.
Another recent casualty of the industry downturn is Foley Family Wines, which closed its production facility for the historic Chalone winery, and Constellation Brands also notified over 200 employees of upcoming layoffs at Mission Bell Winery.
As of February 2026, California has seen a decline in its number of wineries, dropping from 4,727 in 2025 to 4,646. Additionally, a Gallup poll conducted in August 2025 indicated that alcohol consumption among American adults has decreased to 54%, suggesting shifting consumer habits may be influencing these industry changes.
Why this story matters: The closures reflect broader trends in the wine industry and changing consumer behavior.
Key takeaway: Major winemakers are restructuring due to underutilization and decreased demand.
Opposing viewpoint: Some argue that the industry should adapt to evolving consumer preferences rather than reduce production capacity.
