Wine is an economic driver that we can't afford to ignore

The wine industry seems to have lost some of its luster in the last few years — regionally, nationally and even internationally. That’s bad news for the community long heralded as the hub of Oregon’s highly regarded and historically fast-growing segment.

Oregon’s wine industry, ranked fourth nationally after those of California, Washington and New York, has been generating about $8.5 billion a year in economic activity. It has been supporting almost 40,000 jobs and generating almost $275 million in annual tax and fee revenue.

It has also proven a key driver in the state’s travel and hospitality sector, which accounts for almost $15 billion in annual economic activity. That in nowhere more evident than McMinnville, which boasts more than 20 winetasting venues in its downtown core and 250 wineries in a 20-mile radius.

What’s gone wrong? More importantly, what can be done about it? First, let’s consider the issues we’re contending with:

- The pandemic depressed wining and dining around the world. It may never fully recover, as some pandemic-induced shifts seem to have become stubbornly ingrained.

- In the U.S., President Trump marked his new term by alienating Canada with tariffs and takeover threats, serving to decimate a market accounting for more than one-third of all American wine exports. In the face of his 51st state rhetoric, exports to Canada plunged to essentially zero overnight, and have remained there ever since. Meanwhile, his immigration crackdown has raised vineyard and winery labor-force concerns.

- Population growth has fallen below the replacement level in most of the developed world, particularly North America, Europe and East Asia. In the U.S., the Baby Boomer bulge is running its course as well, confronting the industry with a smaller, younger, less affluent and less wine-oriented customer base.

- Surging housing costs, rising inflation and stagnant wage growth seem to be fostering greater price resistance. That’s particularly true at the higher price points associated with the Willamette Valley’s heralded Pinot Noir mainstay, accounting for two-thirds of its planted acreage.

- Alcohol consumption has been declining, thanks to health concerns, the rise of a legal marijuana culture and other factors. Meanwhile, climate change is fueling fears about water supply, wildfire smoke and adverse weather patterns, and America’s unsettled political climate is depressing tourism from abroad.

Production has declined from its 2020 peak for all but one of the nation’s top eight producers, even lower-end, mass-market producers like nation-leading E. & J. Gallo. So where does that leave Oregon?

The Oregon Vineyard and Winery Census Report, just released by the Oregon Wine Board, confirmed significant declines in harvest, production and sales last year.

It indicated total wine grape production in 2025 fell 25% in volume and 28% in value, compared to 2024. It said the state had lost 33 wineries, 77 vineyards and more than 2,500 planted acres during the year, and that a majority of vineyards had reported leaving at least some acreage unpicked.

Exports were off 29%, the report observed, “driven by near total loss of access to the Canadian market.” Other sources indicated Australian and New Zealand producers were moving aggressively to fill the void, so that market may be hard to get back.

And the response?

We think it’s going to take something much more nuanced and sophisticated that the dairy industry’s “drink more milk” or poultry industry’s “eat more chicken.”

Leading national analyst Rob McMillan said, “It is foreign to see wine industry metrics flatten out. This isn’t like any era before, so the solution will not be straightforward. We lack a historical solution set to emulate.”

But he also said, “I do not doubt that creativity, something we have in abundance, will provide solutions.”

Oregon Wine Board chief Gina Bianco also struck an optimistic local note, saying, “Despite ongoing marketplace barriers, our growers and vintners remain committed to producing world-class wines.” And finding markets for them, we might add.

California, which has historically accounted for 95% of American wine export volume, is already moving aggressively to develop new markets abroad to replace the gaping Canadian void. That’s something Oregon can probably emulate with a nimbler and better diversified attack on a smaller, more manageable scale.

But the thing that probably makes the most sense is a marketing push targeting relatively mobile and affluent Americans in their 30s and 40s, aimed at stirring greater interest in upper-end wine consumption and related tourism opportunities — the mainstay for our state in general and our region in particular.

The 50-and-up crowd is thinning out. We need to draw interest in the generations trailing behind them in what Oregon has to offer, including world-class wine and the verdant rolling hills on which it’s produced.

On a larger level, we should also be doing anything we can to boost housing affordability, foster middle-class affluence, dampen inflation, curb climate impacts and restore long-term stability to treasured political and economic relationships.

When life hands you lemons, it’s time to make lemonade. And the newly released wine report suggests that’s where we find ourselves today — all of us, inside and outside of the industry, because it seems fate has left us all in this together.