Why better financial information, stronger customer relationships, and smarter business decisions matter more than ever.

The wine industry has spent years discussing declining consumption, excess inventory, rising costs, and changing consumer behavior.

The 2026 Wine Industry Financial Symposium in Napa reinforced just how significant these challenges have become.

Discussions around financial transparency, cost control, customer relationships, and artificial intelligence reinforced the importance of making meaningful operational changes.

But one message stood out: wineries cannot afford to spend another year waiting for conditions to improve.

Many of the challenges facing the wine industry are outside an individual winery's control. However, winery owners have considerable influence over how they operate, manage their finances, engage customers, and plan for the future.

As we prepare for 2027, here are six priorities every winery should consider.

1. Get Your Financial and Operational Data Organized

Many wineries have plenty of data but struggle to turn it into useful information.

Accounting systems, production software, inventory records, and customer databases often operate independently.

The result? Winery owners make important decisions without a complete understanding of their business.

Accurate winery bookkeeping is essential, but recording transactions is only the beginning.

Understanding production costs, inventory values, sales-channel profitability, and cash flow provides the information needed to make better decisions.

You cannot effectively manage what you do not understand.

2. Focus on the Customers You Already Have

The symposium highlighted an important challenge: existing wine consumers are purchasing less frequently.

While attracting new customers remains important, wineries should be asking how they can strengthen relationships with those already supporting their brands.

Talk to your customers.

Understand what they value, why they purchase, and what might encourage them to engage more frequently.

Then evaluate your wine clubs, tasting experiences, and marketing programs against those expectations.

Customer retention should be a deliberate strategy, supported by measurable financial results.

3. Start Experimenting With AI

Artificial intelligence was a prominent topic at the symposium, particularly its potential to improve sales, marketing, and productivity.

For wineries operating with limited resources, AI offers opportunities to work more efficiently.

Start small.

Experiment with marketing communications, customer segmentation, administrative tasks, and purchase behavior analysis.

Ask AI tools about your winery. Is the information accurate? Does your business appear when potential visitors ask for recommendations?

Protect confidential information and maintain human oversight.

The goal isn't to use AI everywhere. Use AI where it creates value.

4. Surround Yourself With the Right Business Partners

One important takeaway from the cost-control discussions was that the cheapest option is not always the best option.

This applies to suppliers, banks, technology providers, distributors, and accounting partners.

Wineries have unique financial challenges, particularly around inventory, production costs, profitability, and cash flow.

Working with professionals who understand those challenges can make a significant difference.

A specialized winery accounting partner should do more than produce financial statements.

They should help you understand what the numbers mean, identify opportunities for improvement, and make more informed decisions.

The right partners should contribute to your success, not simply complete a transaction.

5. Understand Your Profitability and Cash Flow

Revenue does not equal profitability, and profitability does not equal cash flow.

This distinction matters especially for wineries.

Production investments happen long before wines are sold. Inventory can tie up substantial cash, while different sales channels generate very different margins.

Without reliable winery cost accounting and cash flow forecasting, owners can easily misunderstand their financial position.

Regularly review product profitability, inventory levels, operating expenses, and sales-channel performance.

Identify what creates value and what consumes resources without delivering sufficient returns.

Financial discipline is not about cutting every expense. It is about spending money where it makes the greatest difference.

6. Build a Plan and Hold Your Team Accountable

The symposium reinforced the importance of financial transparency, realistic budgeting, and accountability.

A budget should not be something created once and forgotten.

Develop a realistic financial plan for 2027. Establish measurable goals, assign responsibility, and review performance regularly.

Make financial information accessible to the people responsible for managing different parts of the business.

Encourage employees to understand how their decisions influence costs, profitability, and cash flow.

And consider creating a stop-doing list. Not every activity deserves to continue simply because it has always been done.

2027 Needs to Be Different

The wine industry cannot control consumer confidence or broader economic conditions.

But wineries can improve their financial information, strengthen customer relationships, embrace useful technology, invest in knowledgeable partners, and make better operational decisions.

At Protea Financial, we help wineries gain clarity on accounting, production costs, inventory, profitability, and cash flow. We see firsthand how valuable reliable financial information is when owners make difficult decisions.

You do not need to tackle all six priorities immediately.

Choose two or three. Build a plan. Measure progress. Take action.

The wineries that succeed in 2027 will not simply be those producing exceptional wine. They will be the businesses that combine quality with financial discipline, informed decisions, and consistent execution.

Zane Stevens founded Protea Financial, an accounting and advisory firm specializing in the wine industry.

Running a winery creates accounting challenges most businesses never face. Wineries often incur production costs months or years before a bottle sells. Inventory moves through multiple stages, from grapes and bulk wine to finished goods. Revenue comes through tasting rooms, wine clubs, direct-to-consumer sales, and wholesale distribution, each with different financial considerations.

These complexities make winery accounting fundamentally different from traditional bookkeeping. Wineries need financial systems and experienced accounting professionals who understand how the wine industry operates.

Accounting Services Designed for Wineries

Founded in 2014, Protea Financial specializes in outsourced accounting and financial advisory services for wineries and beverage businesses. Based in Novato, California, the firm supports clients with a team of 40 professionals.

Protea Financial provides bookkeeping, accounts payable and receivable, payroll support, financial reporting, and inventory management. Specialized services include bulk wine and finished goods costing, inventory reconciliations, sales tax compliance, budgeting, cash flow forecasting, and financial advisory support.

Accurate inventory costing, proper allocation of production expenses, and reliable financial reporting are essential for understanding winery profitability. Protea also helps wineries improve accounting processes and integrate technology across their operational and financial systems.

Beyond Bookkeeping: Turning Financial Information into Better Decisions

Effective winery accounting extends beyond recording transactions and producing financial statements. Winery owners need to understand where their business is profitable, how inventory affects cash flow, and what their financial results mean for future operations.

Protea Financial combines accurate financial reporting with practical business guidance to help winery owners identify challenges, evaluate opportunities, and make informed decisions.

Through its outsourced accounting model, Protea provides access to specialized financial expertise without requiring wineries to maintain a full in-house accounting department.

About Protea Financial

Protea Financial is a specialized accounting and advisory firm serving wineries and beverage businesses across the United States. The firm delivers financial clarity, reliable reporting, and the expertise needed to support sustainable business growth.

Learn more at www.proteafinancial.com.

When accounting firms talk about experience, they usually do the same thing. They add up every team member’s total career years and put the biggest number they can find on the website.We wanted to do something more conservative and, I think, more honest. We counted only the time our team has spent here at Protea, doing wine and beverage accounting for our clients.

That number is 205 years.

It’s shared across our 38-person accounting and client service team, with accountants in Gqeberha and client service managers in the US. On average, each person has been with Protea for more than five years:

• Seven have been here more than a decade.

• Sixteen have been here more than five years.

• Nearly two-thirds have been here more than four years.

And 205 years is a floor, not a ceiling. It doesn’t include the wine industry experience many of our team brought, so our real wine experience is higher. It also doesn’t include the years they spent in accounting, audit, and finance before joining us, so our accounting experience is even higher.

Why tenure matters more in wine than almost anywhere else

Most businesses run on a twelve-month cycle that a capable accountant can learn in a quarter or two. Wine doesn’t work that way.

A winery’s financial year is shaped by harvest. Costs flow through grapes, bulk wine, barrels, and bottling before they ever become case goods, and some of that inventory sits for years before it’s sold. Then there’s excise reporting, wine club runs, DTC versus wholesale margins, and the realities of three-tier distribution. Getting these right isn’t about knowing the rules. It’s about seeing how they play out across many vintages and wineries.

You only build that judgment one harvest at a time. Every year someone spends at Protea is another harvest costed, another year-end inventory closed, and another set of client questions they’ve already worked through once. That experience compounds, and you can’t shortcut it.

There’s a wider industry reason this matters too. The accounting profession is facing a well-documented talent shortage, and turnover is a fact of life at many firms. For a client, that often means a new person on your books every year or two, along with the cost of explaining your business all over again. We’ve deliberately built Protea to be a place people stay, and the numbers above show it.

What this means for the businesses we work with

Experience matters only if it makes a difference for our clients. Here’s where it does.

You stop re-teaching your business. When the team that learned your operation is still the team running it, you aren’t spending each year onboarding a new accountant into your cost structure, blending decisions, or wine club quirks.

Institutional memory stays intact. Why did you change your overhead allocation three years ago? Why is that bulk lot valued the way it is? On a long-tenured team, someone remembers. That continuity protects the consistency of your numbers year after year, which matters to your lenders, your auditors, and your own decision-making.

Harvest and year-end are less painful. The busiest, highest-stakes periods are where experience shows most. People who’ve lived through many harvests know what to expect, what usually goes wrong, and what needs attention early.

You get pattern recognition, not just bookkeeping. Our team has seen how many wineries handle the same challenges: DTC channel costs, inventory build-up, pricing pressure, growth funding. That perspective turns your monthly close into a conversation about what’s working and what isn’t, not just a set of reports.

You build a relationship, not a vendor arrangement. Trust comes from time. Clients tell us they value knowing the people on their account and knowing they’ll still be there next year.

The number behind the number

I’m proud of 205 years. But what I’m really proud of is what it says about the people here. They’ve chosen to build their careers at Protea, and they’ve chosen to get very good at one industry. That commitment benefits our clients every month.

Put 205 years to work for your winery.

If you’re looking for an accounting team that already understands wine and plans to stick around, I’d love to talk. Send me a message or book a time through our website.

A few years ago, we took on a winery that knew exactly which wine paid the bills. It was their volume SKU. 3,500 cases a year into distribution, the label everyone in the market recognized, the one the rest of the portfolio leaned on.

We ran the numbers. They lost money on every single case they sold.

They weren't careless. They had a CFO at the time. They knew their gross margin was healthy, right around 40%. Nobody had ever asked what it cost them to make those sales.

That number has a name, and it is the one I want more winery owners looking at.

What contribution margin actually is

Gross margin tells you what's left after the cost of the wine in the bottle. Contribution margin tells you what's left after the cost of the wine and everything you spent to move it.

Sales, less cost of goods sold, less the costs to actually make the sale.

That last part is where it all lives. Billbacks and depletion allowances. Freight. Samples and POS. Commissions. The salaries of the people doing the selling. Credit card fees. The shipping you quietly subsidize. The staff hours on the tasting room floor.

Gross margin is a production number. Contribution margin is a business number.

Two channels can have identical gross margins yet completely different economics because one costs three times as much to serve. Gross margin will never show you that. Contribution margin is the only view that puts your channels on the same footing and lets you rank them honestly.

What it looked like for that winery

Here is roughly what we found on that 3,500-case SKU. The numbers are rounded, but the shape is real.

Per case into distribution:

Revenue — $120 Cost of goods sold — $72 Gross margin — $48, or 40%

We feel good about this. And a lot of the time, that's where the conversation stops.

Now let's look at the rest:

Billbacks and discounts — $30 Freight — $8 Allocated sales salaries — $20 Total cost to make the sale — $58

Contribution margin: negative $10 per case.

Across 3,500 cases, that's $35,000 walking out the door on their supposed hero SKU, before a single dollar of overhead.

The billback line is what got them. When we asked how their billbacks were going, they said, "Not too bad."

They were giving away the equivalent of three bottles with every case they sold.

And they had good reasons for every one of those programs. They were chasing shelf placement in the best sell-through grocery stores in their markets, which is exactly where you want your volume SKU to be. Each program was defensible on its own. Nobody ever added them up. Because the total never appeared as a cost, it never appeared in anyone's thinking.

That's the pattern. It's seldom one catastrophic number. It's four or five ordinary ones that nobody added up.

Now do it for your DTC channels

This is where it gets genuinely useful for most wineries, because DTC isn't one channel. It's four or five wearing the same name.

Start with DTC as a whole, then split it. Tasting room. Online. Club or subscription. Events. Retail. Run contribution margin on each one separately, and you will find they look nothing alike.

Events are the clearest example. On the East Coast especially, where you have to compete hard to get people through the door, live music and ticketed events are a real part of the business model. Run the contribution margin on those events, and it very often comes back negative.

That may be completely fine. Getting people in the door is your entrance price. The question is what happens once they're inside. How much wine moves during the event? How many of those people convert to club members with recurring revenue and a long lifetime value?

So the rule I'd offer is this: a channel that loses money can absolutely earn its place, but only if you can name the channel it feeds and the rate at which it converts. If you can't name both, you don't have a strategy; you have a habit.

And if a channel is deeply negative, no amount of strategic storytelling fixes it. Contribution margin can't be the only input to the decision. But it has to come first.

Where to start

You don't need a new system for this. You need revenue and case equivalents by channel, discounts by channel, fulfillment and tasting room payroll, shipping cost and how much of it you passed on, and a COGS number you actually trust.

Reach out to your accountant this week and ask them to build out contribution margin by channel. If they can't, or your system won't support it, that's worth knowing too.

At Protea Financial, we do this work for wineries every week: SKU-level costing, channel-level contribution margin, and the uncomfortable conversation that usually follows. If you've never seen your business cut this way, I'd genuinely like to show you what it looks like.

Winery accounting has a way of becoming more complicated without anyone formally deciding that it should.

A winery grows. Production increases. DTC becomes a larger part of the business. Wholesale expands into additional markets. Inventory becomes more significant. Reporting expectations increase. And yet the accounting function may still depend on the same person, or the same basic processes, that worked when the business was much smaller.

That can work for a surprisingly long time.

Until it doesn't.

The challenge is not necessarily that a winery has hired the wrong accountant or bookkeeper. More often than not, the accounting structure has not kept pace with the complexity of the business.

Winery Accounting Is Different

Wine businesses face accounting challenges that are not found in many other industries.

Inventory can remain on the balance sheet for years before being sold. Costs move through farming, production, aging, bottling, and finished goods. Bulk wine has to be reconciled into bottled inventory. Revenue and margins may need to be understood across tasting room, wine club, ecommerce, wholesale, and distributor channels.

Add compliance requirements, distributor activity, depletion information, and harvest seasonality, and the accounting function becomes an important part of understanding how the business is actually performing.

That requires more than simply recording transactions correctly.

It requires processes, documentation, review, and an understanding of how winery operations ultimately flow through the financial statements.

The Risk of Relying on One Person

Many wineries rely heavily on one bookkeeper, accountant, controller, or office manager who has accumulated years of institutional knowledge.

That person may know which reports need to be run, how inventory reconciliations work, where unusual transactions should be recorded, and what needs to happen during month-end close.

The problem is that much of that knowledge may exist only in that individual's head.

Vacations can delay work. Turnover can create disruption. A departure can leave the winery trying to reconstruct processes that were never properly documented.

The issue is not the individual's quality. Even an exceptional employee can become a single point of failure when there is no backup, a review process, or a documented system for the role.

Temporary Help Has Its Limits

When accounting capacity becomes stretched, wineries frequently respond by adding temporary or general accounting support.

That may solve an immediate workload problem.

Someone can process bills, complete reconciliations, enter transactions, or help get the books caught up.

But adding capacity does not automatically add winery expertise.

A competent accountant entering the wine industry still needs time to understand inventory flows, cost allocations, channel reporting, distributor activity, and the operational realities behind the numbers.

There is nothing wrong with learning those skills. The question is whether the winery has the time, documentation, and internal support necessary for that learning process.

Simply filling a seat does not necessarily solve the underlying structural problem.

What a Stronger Accounting Function Looks Like

As wineries grow, the objective should be to build an accounting function that is less dependent on individuals and more dependent on repeatable processes.

That usually means several things.

Important procedures should be documented rather than relying on institutional memory. Someone should be able to step in when another team member is unavailable. Month-end reconciliations and financial reporting should include an appropriate level of review. And the people responsible for winery-specific accounting areas should understand the underlying business activity.

The accounting structure should also align with the winery's size and needs.

Not every winery needs a full accounting department or a full-time controller. Some need additional bookkeeping capacity. Others need stronger month-end oversight, better inventory accounting, or more reliable financial reporting.

The goal is not necessarily to add more people.

It is to build sufficient structure, expertise, and redundancy so that the accounting function can consistently support the business.

A Useful Question for Winery Leaders

Instead of asking, "Do we need another accountant?" winery owners and operators may benefit from asking a different question:

Has our accounting function grown with the rest of the winery?

If the answer is no, the next step may be less about filling another position and more about examining the systems, knowledge, oversight, and support surrounding the accounting function.

Because as a winery becomes more complex, its accounting infrastructure eventually has to evolve with it.

The wine industry is facing no shortage of pressure. Demand is softer, costs remain high, tasting-room traffic is less predictable, and excess inventory continues to consume cash.

InnoVint’s 2026 State of Winery Health Report looks beyond those challenges and asks a practical question:

Why are some wineries performing well while others facing similar conditions are struggling?

Based on responses from 541 winery professionals, the report evaluates financial, operational, and cultural health. Its central finding is that winery health depends less on location, size, or sales channel than many might expect. What matters most is how the business is managed.

Financial Health Is the Weakest Link

Only 42% of wineries rate their overall business health as good or excellent. In comparison, just 40% say the same about their financial health.

Operations and culture remain stronger. Sixty-two percent describe their operations as good or excellent, and 69% rate their culture as great or exceptional.

That suggests many wineries still have capable teams and functional operations, but their financial foundations are under strain.

Sales remain the biggest concern, cited by 80% of respondents. Tasting-room traffic, rising production costs, excess inventory, and competition from other brands and beverage categories also ranked highly.

All of these pressures are closely connected. Slower sales create excess inventory. Inventory ties up working capital and increases storage costs. Pressure to move wine can lead to discounting, which can further weaken margins. It is a vicious cycle wineries operate in.

Five Habits of Healthy Wineries

InnoVint identified five habits that separate healthier wineries from struggling businesses.

First, they run lean and protect profitability. Seventy-three percent of healthy wineries are profitable, compared with only 21% of struggling wineries.

One finding is particularly important: wineries with flat sales are profitable almost as often as growing wineries—57% compared with 58%. That challenges the assumption that growth alone will solve a winery’s problems. Growth without operational discipline can create more inventory, complexity, and working-capital pressure.

Second, healthy wineries understand what each wine earns. Forty-three percent of wineries still make pricing and discounting decisions without knowing the margin effect on each SKU. Even among wineries confident in their pricing, many do not know the true production cost or profit per bottle.

Revenue is great, but alone it does not identify a winery’s strongest products. Better decisions require accurate costing, SKU-level profitability, channel margins, and visibility into the impact of discounts. Clear and accurate margin data makes a big difference.

Third, healthy wineries operate connected systems. Fifty-nine percent of respondents said inefficiencies are costing them money, often because their production, inventory, sales, and accounting systems do not communicate effectively.

When teams rely on disconnected spreadsheets and duplicate data entry, reporting slows down, and errors become more likely.

Fourth, they invest in culture. Wineries with strong cultures report better employee satisfaction, healthier operations, lower turnover, and stronger financial performance. Culture is not separate from execution. It affects communication, accountability, and the speed at which problems are identified.

Finally, healthy wineries participate in their communities. Wineries deeply involved in local and industry networks were more than twice as likely to describe themselves as healthy overall: 60% compared with 29% among minimally involved wineries.

Turning the Findings Into Action

The report points toward several practical priorities:

• Calculate the true cost and profit of every wine.

• Review pricing and discounts against margin.

• Align production with realistic demand.

• Improve cash flow and inventory forecasting.

• Connect financial, production, sales, and inventory information.

• Select one measurable operational improvement each quarter.

The broader market remains difficult, and individual wineries cannot control consumer demand or distributor consolidation.

They can control the quality of their costing, systems, forecasting, communication, and decisions.

That may be the report’s most useful conclusion: healthier wineries are not waiting for conditions to improve. They are managing more deliberately with the information they have today.

For deeper analysis, read more here.

The 2026 SVB Direct-to-Consumer Wine Report delivers a message that every winery owner and operator should pay attention to.

The headline isn't that visitation is down. Most wineries already know that.

The headline isn't that wine club growth has slowed. Most wineries are experiencing that reality as well.

The real story is that while the median winery reported no growth, the top-performing quartile of wineries increased revenue by 22%, while the bottom quartile declined by 13%.

In other words, wineries are operating in the same market conditions but achieving dramatically different results.

So what separates the winners from the rest?

The Industry Challenges Remain

The report confirms several trends that continue to pressure winery profitability.

Direct-to-consumer sales remain the foundation of the premium wine business, accounting for approximately 72% of revenue. Yet the channels driving those sales are under strain.

Tasting room visitation continues to decline, reducing opportunities to acquire new customers and wine club members. At the same time, wine club growth has slowed as acquisition rates struggle to keep pace with attrition.

These challenges are real and unlikely to disappear overnight.

However, the report suggests that market conditions alone do not determine success.

The Key Difference: Customer Focus

Perhaps the most valuable insight from the report is the distinction between the mindset of high-performing wineries and struggling wineries.

According to SVB, successful wineries focus outward on customers and relationships.

Struggling wineries focus inward on operations and costs.

That distinction may sound simple, but it has significant implications.

The wineries achieving growth are investing time in understanding their customers, building stronger relationships, creating memorable experiences, and maintaining meaningful engagement beyond the tasting room.

Meanwhile, struggling wineries are more likely to focus on reducing expenses, lowering prices, improving operational efficiency, or upgrading facilities in the hope that customers will return.

Operational discipline is essential. Every winery should manage costs and maintain financial control.

But cost-cutting alone does not create demand.

Taking the Winery to the Customer

One of the most interesting themes throughout the report is the growing emphasis on meeting customers where they are.

Many of the highest-performing wineries are expanding engagement beyond the winery visit through regional events, wine dinners, club gatherings, community involvement, and direct customer outreach.

Rather than waiting for consumers to come to wine country, they are finding new ways to strengthen relationships in the markets where their customers live.

The wineries succeeding today appear to recognize that the future of direct-to-consumer sales extends beyond the tasting room.

What Winery Operators Should Do Next

The report points to several practical actions winery operators can take immediately:

• Develop a deeper understanding of your customer base and segment customers based on behavior, not just demographics.

• Focus as much attention on retention as acquisition.

• Create opportunities to engage customers between club shipments and winery visits.

• Evaluate customer lifetime value, conversion rates, and retention metrics alongside traditional sales measures.

• Invest in relationship-building initiatives that strengthen customer loyalty and brand affinity.

The wineries growing today are not waiting for conditions to improve. They are adapting their strategies to match changing consumer behavior.

The Opportunity Ahead

The most encouraging takeaway from this year's report is that growth remains possible.

The data clearly shows that some wineries are finding ways to succeed despite declining visitation and changing consumer preferences. The difference is not simply the market they serve. It is how they respond to the market they are given.

At Protea Financial, we work exclusively with wineries to help them understand their numbers, identify opportunities, improve profitability, and make better business decisions. From operational accounting and cost accounting to financial reporting and winery-specific advisory services, our focus is on helping wineries turn information into action.

If you're looking to better understand your customer profitability, wine club performance, operational efficiency, or overall financial health, let's start a conversation. The wineries that thrive over the next decade will be those that combine strong financial management with a deep understanding of their customers.

The data is available. The opportunity is there. The question is whether your winery is positioned to take advantage of it.

Download the full report here.

Read more analysis here.

Need help with your numbers? Reach out.

The 2026 BMO Wine Market Report confirms what many winery owners have already been experiencing firsthand: the wine industry is no longer dealing with a temporary slowdown. It is operating through a structural reset.

While the U.S. wine market still surpassed $115 billion in total value in 2025, overall wine volume declined again, continuing a multi-year trend that is reshaping nearly every segment of the business. A worrying trend that continues to reshape the industry and shape perceptions of where the bottom could be. According to the report, changing demographics, affordability pressures, evolving consumer habits, distribution disruptions, and rising operating costs are converging.

For winery owners, the key takeaway is simple: the old assumptions no longer hold.

For years, much of the industry conversation centered around oversupply. Too many grapes, too much bulk wine, and too much inventory sitting in tanks and warehouses. While those issues remain very real, the BMO report makes it clear that the deeper challenge is weakening demand.

Total market volume declined another 4% in 2025 to 362 million cases, while still table wine volumes are now roughly 20% below 2018 levels. California shipments into the U.S. market have also fallen significantly from previous highs.

Demand-driven slowdowns create operational pressure across the entire business. Inventory moves slower. Cash conversion cycles lengthen. Forecasting becomes less predictable. Production planning carries greater risk. Margins become harder to defend. Overall pressure that, if not managed appropriately, would lead to people exiting the space.

At the same time, the report highlights a major demographic transition already underway. Baby Boomers, who largely fueled the premium wine boom over the past several decades, are drinking less as they age. Meanwhile, younger consumers have not adopted wine at the same rate as previous generations did.

What is important, however, is that the report does not suggest younger consumers dislike wine. In fact, many younger consumers express interest in drinking more wine. The challenge is conversion and consistency.

Wine is now competing in a dramatically different marketplace. And they are struggling to win. RTD cocktails, hard seltzers, cannabis beverages, hemp-derived THC drinks, and countless alternative lifestyle choices are competing for the same discretionary spending. Many younger consumers also continue to view wine as expensive, intimidating, or overly complicated compared to those alternatives.

Premiumization alone is unlikely to solve this challenge moving forward.

The report also repeatedly highlights affordability as a growing issue. Inflation, higher housing costs, student loan repayments, and broader economic uncertainty have changed how consumers make purchasing decisions. At the same time, wineries continue facing rising costs for labor, glass, freight, and fulfillment.

This creates margin pressure from both sides.

Operationally, that means wineries need far more precision than they did during the growth years. Understanding true SKU profitability, inventory carrying costs, channel margins, and customer acquisition costs is becoming increasingly important in a slower-growth market.

Direct-to-consumer remains one of the strongest opportunities for wineries, particularly those with premium positioning and strong customer relationships. According to the report, 50% of wineries surveyed still expect DTC growth this year. It will be interesting to see if they are actually able to achieve these goals.

But the DTC environment has changed as well.

Shipment volume has fallen significantly from pandemic highs, shipping costs continue to rise, and lower-priced wines are becoming more difficult to sell profitably through fulfillment channels. The easy years of DTC growth appear to be over. Success today depends much more heavily on customer retention, hospitality quality, operational discipline, and consistent communication.

The report also points to growing disruption in the wholesale tier, highlighted by RNDC’s exit from California. More wineries are reporting reduced distributor support and taking on greater responsibility for account management and market development themselves.

Route-to-market strategy now matters more than ever.

Perhaps the most important message in the report is that industry consolidation is likely to continue. Total U.S. wine market volume is roughly back to 2012 levels, yet the number of wineries is nearly 50% larger than it was then.

That reality will create both challenges and opportunities.

The wineries most likely to succeed through this next phase of the market will not necessarily be the largest. They will be the ones with operational discipline, financial visibility, strong customer relationships, and the ability to adapt quickly to changing market conditions.

For winery owners, operational clarity is no longer just a financial management tool. It is becoming a competitive advantage.

Download the full report here.

If you need help understanding your costs and forecasting for the future, reach out.

The release of the latest report from Azur Associates provides one of the clearest assessments of the current state of the wine industry. The report’s message is direct: this is not simply a temporary slowdown or another cycle the industry can wait out. The market is undergoing a structural reset.That perspective aligns with much of the data we have seen from Silicon Valley Bank, Rabobank, and other industry sources over the past few years. Demand has softened, inventory levels have increased, and younger consumers are approaching alcohol very differently from previous generations. However, where Azur stands apart is in its interpretation of what these trends actually mean for the future of wine.

The report makes a strong case that the industry is moving toward a much smaller, significantly more competitive market. Consumption patterns have changed, and the assumptions that supported growth for decades are no longer reliable or realistic. Consumers are drinking less frequently, exploring alternative beverage categories, and placing greater importance on value, convenience, and occasion. Consumption habits are just different! Wine is no longer competing only within its own category. It is competing against a broader range of beverage options that often align more closely with current consumer habits.

One of the most significant challenges highlighted in the report is distribution compression. This has been a growing problem, but it is spreading. Both off-premise and on-premise channels are becoming increasingly competitive. Retailers are reducing SKUs for other beverages or products, distributors are becoming more selective because placements are so much harder, and it is leaving many brands struggling to maintain visibility. All of this is happening and at the same time, ready-to-drink beverages and spirits continue gaining share in on-premise environments. This creates additional pressure on wineries already dealing with slowing sales velocity and changing consumer behavior.

The report goes into the touchy subject of exits. IT highlights the changing landscape for valuations and mergers and acquisitions. It is not pretty. Transactions are still occurring, but the market has shifted significantly. Buyers have become more disciplined, capital is more selective (it is a lot more expensive at the moment), and many deals are being driven by strategic exits or financial pressure (which creates downward price pressure). The days of broad optimism and aggressive expansion appear to be behind us for now. Instead, the industry is entering a period where operational discipline and strategic clarity matter more than ever.

One of the more practical elements of the report is Azur’s focus on what it calls the “Four F’s”: Format, Function, Flavor, and Financial value. These concepts center around better alignment with today’s consumer. Packaging, accessibility, occasion-based marketing, evolving taste preferences, and clear value propositions are becoming increasingly important. Wineries can no longer assume that legacy positioning or historical success will carry them forward.

While much of the report is direct about the industry's challenges, and rightfully so, it is important not to interpret the outlook as entirely negative. There are still opportunities for well-run businesses with strong leadership and a willingness to adapt. However, success is likely to look different from what it did in previous decades. Growth will require sharper decision-making, stronger financial oversight, and a clearer understanding of market realities.

From my perspective, one of the most valuable aspects of this report is its honesty. Many in the industry have recognized these trends for some time, but Azur brings them together into a clear narrative about where the market is heading. The wine industry is not disappearing, but it is changing rapidly. Businesses that recognize that shift early and make intentional adjustments will be in a far stronger position moving forward.

At Protea Financial, we continue to work closely with wineries as they navigate these challenges every day. The businesses that succeed in this next phase of the market will be the ones that combine strong operational discipline with the ability to adapt to a changing consumer and distribution environment.

Access the full report here - https://www.azur-associates.com/azurintelligencetest/2026ytd

For a more detailed view of the Azur Associates report, read more here.

For a look at the SVB 2026 State of the US Wine Industry, read more here.

Oh sure, there’s a ton of romance and history in the origins of winemaking.

And every boutique enterprise, no matter how large or small, has a charming tale to tell about their artisan craft and how it all got started.

But at the end of the day, wineries live or die by their numbers

No matter how compelling the story or how good the wine, if the numbers don’t work, the business is bound to fail.
To avoid that, it’s imperative for wineries to have rock-solid data on their day-to-day fiscal operations so they’re able to determine the overall health of their organization.

That’s where having the right financial infrastructure in place becomes critical.

Set Up for Wine Industry

Protea Financial is an outsourced, operational financial partner intentionally focused on the complexities and challenges of wineries.

Winery owners need accurate bookkeeping, timely reporting and proactive inventory management in order to drive profitability.

With 12+ years in the business, Protea Financial is exclusively geared to handle the inventory, production cycles, compliance requirements and capital constraints unique to the wine industry.

Protea Financial leverages fully-integrated, cloud-based systems to deliver real-time visibility, accuracy, and transparency across all financial operations.

Protea is a deeply team-driven group of professionals dedicated to a collaborative work environment that provides wineries with reliable, structured accounting support, freeing them to run their businesses with absolute confidence in the numbers.

Full Spectrum Accounting

Protea Financial supports wineries with everything from accurate day-to-day accounting and specialized cost and inventory accounting to financial reporting, cash flow management, M&A support, and forward-looking insight, providing the level of financial visibility and guidance typically associated with CFO services.

The financial foundation of its services rests on accurate, reliable day-to-day accounting, ensuring books are structured, reconciled, and dependable.

Protea Financials' solution-based reporting covers:

• Transactional processing & bookkeeping

• Accounts receivable & payable processing

• Bank, credit card, sales and inventory reconciliation

• Month-end close and financial reporting

• Balance sheet integrity and account accuracy

• Cash flow visibility and management

• Budgeting and forecasting support

In addition, Protea specializes in inventory and cost accounting that are central to a winery’s performance, with a focus on:

• Inventory reconciliations

• Inventory costing and cost allocations

• Bulk wine and production tracking

• COGS accuracy

• Margin visibility and analysis

• Inventory reporting and valuation visibility

• Variance analysis and issue identification

Why It Matters

While there is reason for cautious optimism, the most recent SVB State of the (wine) Industry report shows slower demand, elevated inventories, capital constraints and significantly, the need for sharper business discipline.

Wineries that fail to adapt will feel the pressure quickly.

Protea Financials’ flexible business model supports wineries as a fully outsourced accounting department, a complement to internal teams, or a targeted solution for specific financial needs.

The viability of individual wineries within the overall industry is at the heart of the Protea Financial paradigm.

“If a winery doesn’t have all the data to make decisions, they’re just running it blindly, which is a terrible place to be,” cautions Zane Stevens, Protea Financials’ Founder. “I want to make sure people in this industry are successful. A winery is a business. It has to be run like one. It starts with sound financial management.”

Zane Stevens, Founder 

To gain clarity in your numbers and make more confident decisions, schedule a free consultation at proteafinancial.com.