Napa Valley giant issues doomsday warning for wine industry as CEO steps down

A Napa Valley wine giant has issued a dire warning about the direction of the industry, pointing to “ongoing category pressures.”

Constellation Brands, the New York-based owner of California’s Robert Mondavi Winery, expects the high-end wine market to decline as its CEO Bill Newlands steps away from the company.

Chief Financial Officer Garth Hankinson pointed to “ongoing category pressures, channel headwinds, the timing of our cost of leveraging and distributor inventory rebalancing” as factors influencing margins in their fourth quarter, which ended Feb. 28.

“US high-end wine has shifted from expected low single-digit growth to low single-digit declines. US high-end spirits are decelerating from plus mid-single-digit growth to flat to slightly down,” Hankinson noted during the company’s April 7 analyst call.

“And so while we’re significantly outpacing the market, it’s sort of on what I would call a little bit of a lower base.”

The company’s CEO Newlands stepped down on April 13 after serving as the company’s leader since 2019. Board member Nick Fink took over the CEO job, saying he wanted to “further build on the company’s core strengths.”

On a positive note, Newlands said the company ended fiscal 2026 with “some solid momentum” in beer despite “a tough economic backdrop with more selective shopping behavior.”

Fink says the company is entering its next phase “from a position of strength,” with its beer portfolio and restructured wine offerings.

Robert Mondavi Winery is located in Oakville, California and is set to reopen April 20 after renovations the company called a “historic transformation.” The location offers a “Pioneer Tasting” course for $60. Hankinson said one area the company is still struggling in is Napa tasting rooms.

“We’ve seen some tasting room softness in our Napa-based wineries,” he also noted.

Other wineries in Napa Valley are also struggling — with local owners selling their wineries to large companies or closing entirely.

The wine industry is in an economic downturn as boomers, a critical demographic for wine, die out.

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