California wine grapes rot on the vine

Summary

Marketplace Morning Report

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

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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.

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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])

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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])

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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]

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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.

Transcript

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[David Brancaccio]

At a time of kombucha or even cannabis, people are drinking less wine. David I'm David Brancaccio in Los Angeles. First today, new data showing layoff announcements from companies running at their highest rate of any January to November period since the first Covid year 2020 71,000 in November alone. Yesterday it was a payroll company that found 32,000 fewer people getting paychecks last month rather than the normal growth that we see month to month. Diane Swonk is chief economist at the audit, tax and advisory firm kpmg. Morning.

[Diane Swonk]

Good morning.

[David Brancaccio]

So a big interest rate decision next week from our central banking friends. You know all this official government data has been delayed. We did have that private sector report yesterday from ADP that was showing a weak labor market.

[Diane Swonk]

It is. And that 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. There still is inflation also simmering out there, but for the moment, the Fed has decided that the labor market, at least for most of them, is more worrisome than the strength we're seeing in inflation. The problem is, of course, we're looking at a lot of old data and we don't have a lot of new data before the Fed actually makes that decision.

[David Brancaccio]

It's not really clear if inflation is the biggest thing we should worry about or the labor market. If we could know, it would clear up some of that dissent.

[Diane Swonk]

It really reflects this odd moment we're in where it's very difficult to determine which one will dominate, because if labor market weakness is due to things are beyond the sensitivity of interest rates, it will not improve and inflation could become a more lingering problem. On the other hand, if you allow the labor market to continue to deteriorate, what you could have is unnecessary pain for an inflation that may indeed resolve itself.

[David Brancaccio]

But despite this anticipated differences of opinion at the Fed, they're going to cut interest rates next week, right?

[Diane Swonk]

Absolutely. They're going to cut either way. And that's coming from the top, from Chair Powell, even though he didn't speak at all since the last press conference for the last meeting. When they cut on October 29th did.

[David Brancaccio]

It with pantomime and body language. Diane Swonk, chief economist at kpmg. Thank you.

[Diane Swonk]

Thank you.

[David Brancaccio]

We have some numbers now on how the Trump administration is pushing to lower fuel economy standards for cars and trucks. Here's Marketplace's Henry Epp.

[Henry Epp]

The White House proposal would still require average fuel efficiency to go up to an estimated 34.5 miles per gallon by 2031. But that's a lot lower than a Biden administration rule, which set a 50 mile per gallon requirement in the same time frame. The Trump administration claims the change will save consumers about $1,000 on new cars. The average new vehicle sold for about $50,000 this fall, according to Cox Automotive. Industry analysts note the weaker standard could also save car companies a bit of money. That's a relief to the industry, which has taken on billions of dollars of new costs from tariffs imposed by the White House this year. Still, many carmakers have investments in electrifying parts of their fleets, and they'll need to meet higher efficiency standards in order to sell cars in Asia and Europe. I'm Henry Epp for Marketplace.

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[David Brancaccio]

In some studies, Americans are drinking less alcohol. That has health and public safety benefits, but it's a challenge for the alcoholic beverage industry. We are certainly drinking less wine, with per capita consumption down about 12% since 2019. This is of concern to wine growers, including in California, who are looking for a way forward. Tina Caputo has this story.

[Tina Caputo]

Katie Baci Galupe Rowe walks me through her family's vineyard in Healdsburg, California, where she grows Zinfandel grapes. So we're at the Frost Ranch. This is our block, about 70 acres. All the grapes she could sell are already picked. Harvest wrapped up here a couple weeks ago, but the vines are still heavy with fruit. Do you smell it?

[Marketplace Host]

Yeah.

[David Brancaccio]

Oh my gosh.

[Tina Caputo]

It's a mixture of raisins and mold. Little sad, yes. About half of this acreage was left unpicked this year, she says. That'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. Rose family is also planning to rip out a whole section of vines, something they never do unless the plants are diseased. This kind of thing is happening across California, says Kyle Collins. He's an operations manager at Allied Grape Growers in Fresno. Collins says growers in the state ripped out almost 40,000 acres of vineyards in the last year.

[Marketplace Host]

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.

[Tina Caputo]

He compares the crisis to a wildfire. Declining demand for wine is the main cause. There's competition from other alcoholic beverages in the market and younger consumers tend to drink less wine. Adding fuel to the fire, Collins says, are federal government policies that put domestic grape growers at a disadvantage. He doesn't mean tariffs, which could actually help US Growers by driving up the cost of imported wines. Collins is talking about regulations that allow big California brands to blend up to 25% cheap foreign bulk wines into their American Appalachian products. The practice is legal, Collins says, but it cuts into demand for local grapes.

[Marketplace Host]

The reality is we've kind of hit the wall here.

[Tina Caputo]

Aaron Lang is definitely feeling that wall this year. He farms vineyards near Lodi, California, and says 2025 is the hardest year his family has experienced in almost two generations.

[Marketplace Host]

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.

[Tina Caputo]

To keep their farms going, he says, many of the region's grape growers are replacing some of their vines with more profitable crops. Lang is planting olive trees.

[Marketplace Host]

Frankly, it's the first time in multiple generations that we haven't been just grape growers, he says.

[Tina Caputo]

It's a necessary but bittersweet transition. In Sonoma Wine Country, I'm Tina Caputo.

[David Brancaccio]

For Marketplace, and in Los Angeles, I'm David Brancaccio. You're listening to the Marketplace Morning Report.

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