Layoffs rock California wine business as Americans ditch drinking

California’s wine industry continues to crack, with dozens of layoffs hitting a Golden State wine cap manufacturer as more Americans leave booze behind.

G-3 Enterprises sent the notice to 66 employees this week, blaming “significant headwinds” in the wine industry, Laura Bream, the company’s vice president for human resources reportedly wrote in an email.

“Like many companies in our industry, we have experienced changes in customer purchasing patterns and production volumes,” Bream said. “While these changes have contributed to the need for restructuring, they reflect broader market dynamics affecting the entire wine sector.”

G3 Enterprises is a wine logistics company led by California-headquartered E. & J. Gallo Winery. E. & J. Gallo Winery is the largest winery in the United States.

Most of the employees work in wine cap closure operations, and will be laid off between Oct. 6 and Dec. 31, according to a Worker Adjustment and Retraining Notification letter filed with the state last week.

The layoffs come as Americans show less and less interest in drinking.

A 2025 Gallup poll showed a record-low 54% of Americans reported consuming alcohol. The 46% of poll-takers who abstained was the largest percentage the poll has ever recorded since it first ran in 1939.

The pollsters noted the decline coincided “with recent research indicating that any level of alcohol consumption may negatively affect health.”

“This has been a sharp reversal from previous recommendations that moderate drinking could offer some protective benefits,” Gallup noted.

Wine has been particularly struck by a lack of interest from younger generations like Gen Z and millennials. A California winery owner told The California Post in February that he believed the wine industry is dying because baby boomers, the top wine-consuming generation, are.

“A lot of people have a misconception that the boomers are drinking less,” owner Jon Phillips said. “This cannot be emphasized enough: It’s not because the boomers are drinking less, it’s because there are less boomers.”

Gen Z in particular hasn’t matured enough to mesh perfectly with wine, Phillips said. “I think it’s just really just a timing and more [of] a maturity [thing],” he said.

Rob McMillan, wine business analyst at Silicon Valley Bank, expressed a similar sentiment to the Los Angeles Times.

“At this point, the entire industry, and it’s not just California, recognizes that there’s a consumer change,” he said.

A wave of winery closures hit Napa and Sonoma counties this year, including the Carneros Hill Winery, Gallo-owned, and Ranch Winery.

McMillan believes the rock bottom for the industry is near, however, and he thinks the industry will stabilize.