California’s struggling wine industry plots major pivot that could change

Forget grapes — it’s all about agave now.

As California’s staple wine industry grapples with declining consumer demand in an oversaturated industry, with the grape market hitting a less-than-sweet snag, wine grape farmers are increasingly turning towards growing agave — a group of spiky succulents known for producing syrups and alcohol — to produce spirits in the hopes of keeping their businesses buoyant.

Agave, which is the main ingredient in beloved spirits like tequila and mezcal, is known for its resilience in hot and dry climates, along with its minimal water usage and lower labor costs when it comes to producing the spirits. It is already widely used in Mexico.

California grape farmers like Joy Merrilees, who runs Castilleja Farms in Kelseyville with her husband and is also the vice president of operations and business development at Shannon Family of Wines, have done their best to adapt to changing times and customer preferences, telling the Sacramento Bee that agave came into her purview after the pair launched a grape-based gin label and had the opportunity to pivot in a new direction.

Investing in agave production turned out to be their next step, due to its ability to grow in her farm’s volcanic soil and its requirement for less water.

The couple now owns a half acre of agave, ranging from rows that were planted three or four years ago to some having been planted just this past June. One of the resulting products — High Chaparral Agave Spirit — will be ready for consumption in two to three years’ time.

“I think being creative and getting innovative is really important for farmers to, kind of, stay in the black,” Merrilees, whose farm includes a 35-acre vineyard, told the Bee.

She and her husband have joined the approximately 100 other agave growers in the Golden State, per a UC Davis 2025 Agave Survey. There are about 1,000 total acres dedicated to the crop state-wide, with it being planted in 38 out of 58 counties — along with a particularly significant increase in Fresno County last year, according to the Fresno Bee.

While there are currently only seven specific agave spirit producers statewide (per the California Agave Council), the interest in the industry is strong among grape farmers looking to make a change and adapt to a changing market.

Ken Richter, the vineyard manager for Brutocao Family Vineyards in Mendocino County’s Hopland, is one of them, being that his business aspects of grape growing, bulk winemaking and bottling have all been drying up.

“I’ve been trying to keep my job — been there for 30 years — and things aren’t looking really good,” Richter told The Sacramento Bee.  “That’s why I’m like ‘What can we grow?’ …There’s a little bit of buzz going around agave.”

While he plans to undergo more research on the succulent before biting the agave bullet and hopes to plant some on his own ranch to try it out, he ultimately fears the buzz may eventually die down, with agave production facing the same decline as grapes.

“That is going to be everybody’s fear,” Richter said to the outlet. “It is an unsure market, that’s for sure.”

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