California wine giant Gallo is making significant cuts by laying off over 90 employees and shutting down a major wine-making facility in Napa Valley. The company, headquartered in Modesto, announced that these layoffs are crucial for adapting to shifting market dynamics and changing consumer preferences. Specifically, 93 employees from various sites will lose their jobs, as detailed in a Worker Adjustment and Retraining Notice filed with the state.

Gallo plans to permanently close its Ranch Winery in St. Helena, which it acquired in 2015 to enhance its presence in the premium wine market. This facility, capable of processing 30,000 tons of grapes, hasn’t achieved the anticipated growth. Consequently, 56 employees, predominantly wine technicians, will be laid off between April 15 and the end of January 2027.

Layoffs will also occur at several Gallo locations, including the Louis M. Martini Winery, Orin Swift Tasting Room, and J Vineyards & Winery. This is not the first instance of layoffs at Gallo; last year, the company closed its Courtside Cellars winery in San Miguel, which resulted in 47 job losses.

These layoffs reflect broader challenges facing the U.S. wine industry, where changing consumer preferences are driving demand for high-quality products rather than lower-priced options. According to wine industry expert Rob McMillan, younger generations are drinking less alcohol, while the aging baby boomer cohort, historically the industry’s primary consumer base, is becoming less active in the market.

Furthermore, Gallo’s offerings predominantly belong to the sub-$12 wine category, which has struggled over the past decade. Competitors, including premium beer and spirits brands, have been tightening the market, posing additional challenges for traditional wine producers.

Looking ahead, Gallo, which renamed itself in 2024 to reflect its broadened portfolio beyond wine, will continue to navigate the complexities of a rapidly evolving beverage market, aiming to sustain its position as the largest wine supplier in the U.S.