Marketplace Morning Report

Episode: California wine grapes rot on the vine
Date: December 4, 2025
Host: David Brancaccio
Featured Reporter: Tina Caputo

Episode Overview

This episode explores the growing crisis facing California wine grape producers amid falling wine consumption in the U.S. Shifting consumer preferences, competition from other beverages, and disadvantageous federal policies have led to grapes left rotting on the vine, mass vineyard removals, and major upheaval for multi-generational farming families. The episode combines on-the-ground reporting from California with economic context and expert interviews, offering a snapshot of the broader challenges in the American agricultural and business landscape.

Key Discussion Points & Insights

1. Economic Snapshot: Labor Market Weakness

• Recent Data: Layoff announcements from companies are at their highest since 2020, with 71,000 in November alone ([01:24]).
• Interest Rates & Fed Policy: Upcoming major interest rate decision from the Federal Reserve, complicated by a weak labor market and delayed government data ([02:00]-[02:44]).
• Expert Insight:
  • Diane Swonk (Chief Economist, KPMG):

    “It certainly just added fuel to the view within the Fed of those of doves that want to cut rates to shore up the labor market.” ([02:13])
    She notes the challenge facing Fed policymakers as they weigh between labor market concerns and persistent inflation.

2. Regulatory Changes: Automotive Industry

• Fuel Efficiency Standards: The Trump administration is pushing a proposal to lower future fuel economy standards for cars and trucks, reducing requirements from 50 mpg (Biden) to 34.5 mpg by 2031 ([03:47]-[05:09]).
• Industry Impact:
  • Could save consumers about $1,000 per vehicle and relieve car companies facing new tariffs.
  • Still, automakers may keep investing in electrification to meet global standards.

3. Spotlight Segment: California Wine Grapes Crisis

• Introduction: Americans are drinking less wine—per capita consumption down 12% since 2019, which is creating ripple effects across California’s wine industry ([06:39]).

• Vineyards on the Brink

  • Healdsburg Field Report

    • Tina Caputo visits Katie Baci Galupe Rowe’s family vineyard, where about half the grapes were left unpicked despite a prime vintage.

      “It's a mixture of raisins and mold. Little sad, yes.” — Tina Caputo, reflecting on the wasted fruit ([07:23]) “We could not have asked for a better vintage, which also makes it kind of a little bit more unbearable that, you know, they're left on the vine.” — Katie Baci Galupe Rowe ([07:36])

    • The family plans to rip out entire sections of vines, a drastic measure usually reserved for diseased plants.

  • Industry-Wide Turmoil

    • Kyle Collins (Allied Grape Growers):

      “Without question, this was the most challenging thing that I've seen in an agricultural industry, be it grapes or anything else since I've been here. It is a crisis.” ([08:03])

    • Nearly 40,000 acres of vineyards removed in California over the past year.

  • Root Causes

    • Falling Demand: Driven by younger generations drinking less wine and more competing beverages like kombucha and cannabis.
    • Federal Regulatory Disadvantage:
      • Regulations allow large California brands to blend up to 25% cheaper foreign wine into bottles labeled as domestic—reducing local grape demand.

      “The reality is we've kind of hit the wall here.” — Kyle Collins ([08:49])

  • Economic Hardship for Growers

    • Aaron Lang (Lodi, California):

      "Over the past 30 years, the cost to farm vineyards has tripled, while the price that we've been paid for our crop, for our fruit has fallen to just one third of what it used to be." ([09:03])

    • Many are switching to alternative crops; for Lang, this means planting olive trees.

      "Frankly, it's the first time in multiple generations that we haven't been just grape growers." ([09:23])

    • The transition is described as “necessary but bittersweet.” ([09:28])

Notable Quotes & Memorable Moments

• On the human cost in vineyards:

  "It's a real shame... We could not have asked for a better vintage, which also makes it kind of a little bit more unbearable that, you know, they're left on the vine."
  — Katie Baci Galupe Rowe ([07:36])

• Industry Viewpoint:

  "Without question, this was the most challenging thing that I've seen in an agricultural industry, be it grapes or anything else since I've been here. It is a crisis."
  — Kyle Collins ([08:03])

• Economic Pressure:

  “Over the past 30 years, the cost to farm vineyards has tripled, while the price that we've been paid for our crop, for our fruit has fallen to just one third of what it used to be.”
  — Aaron Lang ([09:03])

• Generational Shift:

  “Frankly, it’s the first time in multiple generations that we haven’t been just grape growers.”
  — Aaron Lang ([09:23])

Timestamps for Important Segments

• Labor Market & Fed Discussion: [01:24] – [03:46]
• Automotive Fuel Economy Standards: [03:47] – [05:09]
• Wine Consumption Decline & Vineyard Crisis: [06:39] – [09:34]

Tone and Final Takeaway

The episode maintains a measured, fact-based tone, highlighting both the statistical reality and personal consequences of shifting demand for wine in the U.S. It offers a sobering look at how macroeconomic trends and federal policies can rapidly upend regional industries and family livelihoods, creating a climate of uncertainty and forced adaptation for California’s iconic wine growers.