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America’s largest wine producer is closing yet another California facility and cutting jobs, deepening a wave of shutdowns as the state’s wine industry struggles through a prolonged slump.
Modesto-based Gallo revealed plans to shutter its Lodi crush facility and lay off 20 employees, the latest blow in a series of closures by the alcohol giant during a tough chapter for California winemakers.
A spokesperson for Gallo said the decision to close the San Joaquin County facility “reflects available capacity in our other wineries in the region.”
The facility on West Turner Road processes grapes into wine for growers who don’t have their own winemaking operations, according to the San Francisco Chronicle.
The spokesperson said affected employees had been “individually notified” and were receiving support from the company.
Meanwhile, the Lodi shutdown is just the latest in a series of recent cutbacks by Gallo.
Earlier this year, the company announced it would drop three Bay Area locations, including its Ranch Winery in Helena, resulting in nearly 100 job losses.
Last year, Gallo also closed its 300,000-square-foot Courtside Cellars winery in San Luis Obispo County.
This latest closure arrives as California’s $55 billion wine industry grapples with a third consecutive year of shrinking demand.
The downturn is fueled by record drops in alcohol consumption, rising awareness of health risks tied to drinking, and fierce competition from alternatives like hard seltzers.
An industry report published in January by Silicon Valley Bank predicted U.S. wine sales will continue to decline in 2026, though not as sharply as in 2025 — before largely leveling off in 2027 or 2028.
Analysts predict the industry will start to recover after that, with Napa and Sonoma counties poised to bounce back more quickly than most other wine regions nationwide.
Gallo is also slashing staff at several of its renowned labels, including the Louis M. Martini Winery and the Orin Swift Tasting Room in St. Helena, as well as J Vineyards and Frei Ranch in Healdsburg.
“Gallo is aligning parts of our operations with our long‑term business strategy to ensure we remain well‑positioned for future success,” a company spokesperson told The Post.
“As part of this process, we made the difficult decision to reduce certain Wine Country operations. These changes are driven by market dynamics, evolving consumer demand, and available capacity across our wineries.”
According to the spokesperson, all employees affected by the closure are receiving “personalized support, transition packages, and opportunities to explore other roles” within the company.
Though the industry is forecast to steady in the years ahead, this latest closure underscores the mounting challenges for California winemakers as sales weaken and consumers seek alternatives to classic wine.
English (US)