America’s Bulk Wine Glut Should Have Sparked a Brand Boom. Why Hasn’t It?

Over the past few years, the global wine industry news has been a playlist of emo angst peppered by Hans Zimmer-esque impending doom. Wine consumption is declining and, yes, there’s a glut of grapes. Unsurprisingly, economic anxiety is the track of the day.

While the wine lake in Europe has prompted major headlines regarding full-on policy intervention, the U.S. hasn’t escaped its share of the gloom. California in particular — representing well over three-quarters of total domestic production — appears to be approaching dire straits. While this year’s totals are still up in the air as harvest and crush continue, the January 2025 data according to California-centric bulk wine broker Turrentine shows about 25 million gallons of California wine on the market, the majority of it red.

Within the context of the past two decades, that’s an unprecedented ocean. Likewise, California-based Ciatti, the world’s largest bulk wine broker, has repeatedly referred to “sticky inventory” in its reports as a polite term for “We’re drowning in wine.”

Underneath the depressing news, though, there may be a silver lining to tease out. After all, according to basic economics, more supply should mean lower prices. And a string of excellent vintages over the past few years bodes well for the quality of said ocean sloshing around the Golden State and elsewhere. All this potentially sets up a prime opportunity to pair domestic bulk wine greatness with a winning value-brand concept, right?

The Case for a Domestic Bulk-Based Breakout Brand

Wine is grappling with a diminishing slice of the beverage-alcohol pie, and the industry desperately needs innovative answers at the value end. The current bulk market dynamic could spawn that savior product or business concept to help shore up the ongoing generational market decay.

According to Sid Patel, CEO of the Beverage Trade Network and International Bulk Wine & Spirits Show, the moment is theoretically ideal to develop new, high-quality value offerings in the $10 to $20 range.

“Right now, the bulk wine market is in a very unique position,” he says. “We’re seeing incredible quality on offer, and at prices that, frankly, don’t come around often. A lot of juice that would normally be snapped up for higher-end programs is now available at value levels because producers need to move volume.”

It’s absolutely a buyer’s market, with those looking to procure high-quality bulk wine spoiled for choice. “Large wineries are using this moment to secure blending wines and lower their cost of goods, while smaller, boutique producers are taking advantage of the variety available to experiment with new products,” Patel adds. “Everyone, from value-focused retailers to private label specialists, is looking to see how they can use this glut to their advantage.”

Looking back at the previous downturn during the global financial crisis in the late aughts, tremendously successful concepts emerged from similar desolation. While not domestic-dedicated, 90+ Cellars — with its bulk-inspired, non-disclosure contracting for value bottlings — began its dramatic rise around that time.

The general non-disclosure idea isn’t new. It’s been alive and well for centuries under an evolution of monikers: négociant, private label, and “NDA” wines.

“The difference now is U.S. consumers, especially younger drinkers, are more skeptical of wine as a category. They’re looking for accessibility, authenticity, and convenience, not just value.”

In the downturn before that, during post-9/11 economic uncertainty and well before 90+ Cellars kicked off its value-driven concept, a certain dirt-cheap supermarket private label legend was born. “This comes around every few years,” says Liz Thach, Master of Wine and president of the Wine Market Council. “This is how Fred Franzia made Two Buck Chuck. Now is one of those unique times.”

This current edition, with 15 percent tariffs for imported European bulk wine thrown in — combined with the dollar’s recent plummet in international purchasing power relative to the euro — assumes an environment of expensive imports. Surely it must be a prime moment for entrepreneurs to fashion an innovative, bulk-inspired, domestic-focused concept of similar design.

At the most recent bulk wine conference, one that features both domestic and imported juice, Thach observed an overall enthusiastic vibe permeating the space. “There’s so much surplus on the market, and it’s great quality,” she says. “The question is that if they can make it, can they sell it?”

Pricing the Domestic Wine Lake

Kevin Mehra, president and founder of Latitude Beverage Company and 90+ Cellars, is careful to mention that not every downturn is created equal, and it’s critical to point out that his endeavor embraced both domestic and international sources.

“While today’s dynamics — tariffs, global oversupply, shifting generational consumption habits, and domestic producers struggling with inventory — bear some resemblance, it doesn’t feel exactly the same,” he says. “The difference now is U.S. consumers, especially younger drinkers, are more skeptical of wine as a category. They’re looking for accessibility, authenticity, and convenience, not just value. This means the opportunity isn’t simply excess supply at lower prices.”

Additionally, in purely nuts-and-bolts economic terms, this time the U.S. has one hand tied behind its back.

“The costs of making and selling wine have risen dramatically: land, labor, compliance, energy, marketing, distribution, you name it.”

Tariffs and dollar woes layered on top of the domestic glut should be a huge advantage for U.S.-provenance bulk wine — that is, if American wine were comparably priced to its European competitors. Ask any buyer tasked with building and maintaining a program involving both domestic and international producers, and they’ll tell you that is most certainly not the case.

“Yes, oversupply creates downward pressure, but the equation isn’t that simple,” Patel says. “Sometimes, you’ll see certain varieties or regions hold their value despite a glut because the demand for that specific style is still strong. The smart operators are looking at the full picture, not just the grape price per liter.” In-demand whites such as Sauvignon Blanc and Pinot Grigio have shown price resilience. He also points out that all the wine rejected by Canada due to tariff animosity has supersized inventory bloat and stagnation. So the U.S. administration’s claimed tariff benefits are outweighed by their negative knock-on effects.

The nasty catch in what should be a domestic bulk bonanza is that, even under the anvil of all this price pressure, U.S.-sourced bulk wine is still relatively expensive.

“The costs of making and selling wine have risen dramatically: land, labor, compliance, energy, marketing, distribution, you name it,” Patel says. “Even after adjusting for inflation, the total cost base has shifted upwards.”

And while cork has miraculously dodged the U.S. administration’s import ire, one still has to take into account a tariffed winemaking accoutrement that isn’t replicable in the States: European oak barrels.

“What disturbs me for U.S. wine producers, they told us they can buy bulk wine, imported with the tariffs, cheaper than domestic wine,” Thach says.

Despite this scenario, the potential for domestic-dedicated, bulk-contract concepts similar to the 90+ Cellars idea still exists.

The Private Label Proposition

While domestic bulk continues to be more expensive than imported, that might not be a problem in the long run if the concept and presentation are fine-tuned perfectly for the target audience.

Patel says that the younger generation tends to be open to paying a little more for quality, and that they aren’t necessarily anti-wine or obsessively stingy. They’re just put off by how it’s offered to them. “They want something accessible, priced fairly, and packaged in a way that feels like it’s speaking to them, not their grandparents,” he adds. “Affordable doesn’t mean cheap. It means value that matches their budget and expectations.”

“You gotta be pretty big when it comes to volume. It’s going to be easiest for [large interests] to do it.”

A line in broker Turrentine’s report indirectly hints at a window in which killer domestic 90+ Cellars-ish concepts can leverage this spectacular quality-to-price bulk market: “Until we can turn the tables and resume the trend of increasing consumer demand, we are destined to continually chase the markets downward through supply reduction.” That downward chase would likely unfold intermittently in stages, with significant stretches of supply/demand stability following shorter moments of oversupply rebalancing.

One way or another, this current high quality grape glut opportunity will end, even if it reappears several years from now for another leg downward.

Without a doubt, there’s a lot of additional risk launching a new bulk-inspired value concept into a shrinking category while being undercut by imports. But the payoff could be massive for both that company and the overall industry if the idea is able to make a big splash. With such strong headwinds, though, whose job is it to pick up the bat and take huge swings?

Thach thinks a major obstacle to new domestic bulk concepts is lack of initiative and risk appetite. “I get the impression that people are sitting around hoping that someone else does it,” she says. The typically cautious and conservative wine industry isn’t doing itself any favors in that regard. “You gotta be pretty big when it comes to volume. It’s going to be easiest for [large interests] to do it,” she says.

Smaller players are easily forgiven for not taking that chance given today’s challenging market environment and shrinking capital resources. Limited staff would have to sort through mass-distribution quagmires to the 50 states along with the headache of navigating a substantial lineup of products through alcohol approval bureaucracy. So this time around, the task most likely falls to established major players — or ambitious industry upstarts with deep pockets or serious investor capital.

The limited opportunity to enter the game isn’t going to last long, and those who are appropriately positioned to take swings at the idea need to step up in a hurry. “If there was ever a time to bring them in, it’s now,” Patel says. “The cost of acquiring new consumers in wine is at its lowest point in years because the supply side is willing to be flexible. If we miss this chance, we risk losing an entire generation to other drinks.”

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