Doing More With Less: Smarter Winery Operations in a Downturn

Even when market challenges loom, the grapes keep growing - compelling wineries to adapt and operate smarter. I’ve spent two decades in the wine industry, and in recent months I’ve felt a familiar mix of concern and resolve in the cellars I visit. Tanks are full, orders are soft, and teams are being asked to do more with less. As a software founder who built vintrace in close partnership with winemakers, I’ve seen this cycle before. And while a downturn is never easy, I’m convinced it can be the catalyst for wineries to refocus, get lean, and emerge stronger.

Face the Pressure: Demand Down, Supply Up, Costs High

Talk to any mid-sized or large producer right now and you’ll hear a litany of challenges. Global wine demand has slowed; younger consumers are exploring alternatives and overall consumption is waning. In the U.S., tasting room traffic is a bit lower and online sales have dipped, adding to the softness in demand. At the same time, many regions are dealing with oversupply – California’s 2024 crush was the smallest since 2008, yet even so, grapes went unharvested because there was simply nowhere for the fruit to go. Bulk wine is plentiful and selling at rock-bottom prices, with buyers in no rush since they know excess supply will be around through 2025. One industry report noted only 16% of grape buyers plan to buy more fruit in 2025, a stark indicator of how saturated the market is.

This imbalance is squeezing margins from both sides. On the cost front, wineries are feeling the pinch of inflation and rising expenses. The 2022 and 2023 vintages came with higher input costs (think farming, glass, energy), and those are now flowing through into cost of goods, eroding profit margins. Many wineries saw gross margins deteriorate in 2024 and expect that trend to continue into 2025. At the same time, fixed operating costs haven’t let up – if anything, they’ve climbed – while revenue has flattened or fallen. The result is classic negative operating leverage: lower volumes to spread overhead across, and thus declining profitability. I’ve spoken to winery owners who are having to dip into credit lines (at higher interest rates) just to cover inventories and payroll, which further squeezes working capital – a pattern noted in the SVB’s latest report as well.

Then there’s the labor crunch. For years, finding skilled cellar hands and vineyard workers has been a top concern in our industry. Now it’s compounded by the downturn: tight budgets mean smaller crews, yet the work still needs to get done. It’s no wonder a recent sentiment index of wine producers dropped to a 10-year low. When you’re facing weaker sales, excess inventory, rising costs, and a shortage of help, it can feel like everything is stacked against you.

And yet, in all this, I also see a glimmer of something positive: a determination to control the controllables. We can’t change consumer trends or the global economy overnight. But inside our wineries, on the production floor and in the warehouse, there is something we can do – we can get smarter and more efficient.

A Time to Refocus and Innovate

History has shown that downturns, painful as they are, often prompt the wine industry to adapt in important ways. The Australian wine sector, for example, anticipated many of these challenges (from oversupply to climate volatility) and emphasized back in its Directions to 2025 plan that securing the future would require technological innovation and a clear-eyed reevaluation of how we operate. In other words, when the market isn’t lifting all ships, we have to build better ships. This is a time to streamline workflows, adopt new tools, and double down on quality and differentiation.

I don’t mean to sound overly sunny – the struggles are very real. But as one global report put it, “where there are difficulties there are often opportunities”. I’ve noticed wineries using this slower demand period to implement projects they never had time for during the boom years: migrating from spreadsheets to winery management software, training staff on best practices, organizing the cellar, and analyzing their cost structure end-to-end. These investments in efficiency and insight can pay off quickly. In fact, industry leaders are urging producers to redouble their focus on changing consumer preferences and operational excellence while things are slow – so that when the pendulum swings up again, they’re ready to capture growth. A downturn, strange as it sounds, can be a time to get ahead.

Personally, I recall the aftermath of the last major market slump a decade ago: wineries that took the opportunity to modernize and trim waste came out of that cycle more resilient and profitable. Those that stuck to “business as usual” struggled to catch up once demand returned. That lesson isn’t lost on me or my team. It’s why we built vintrace in the first place – to help wineries run better, with clarity and purpose, no matter the market conditions.

Smarter Winery Operations in Action

So, what does “operating smarter” actually look like on the ground? It starts with shedding those little inefficiencies that add up. In busy times, you might tolerate them; in lean times, you can’t afford them. Let me share a couple of examples I’ve seen recently:

Ending the paper chase and bottlenecked workflows.

Not long ago, I visited a winery during crush where work orders were only entered on a single office computer. The cellar crew would literally line up, waiting their turn to input data or grab printed sheets. By the time one job was logged, the winemaking team was already onto the next – the info lagged behind reality. It was a classic production bottleneck. We helped that winery switch to a cloud-based, mobile system, and the change was night and day: the team could enter work orders and lab results right from the crush pad on a tablet or phone, in real time. In their very first harvest with a mobile-enabled setup, Vineyard 29 in Napa found that they could do essentially the same work with fewer people and much less stress. They reported saving about one full week of data entry and a 50% reduction in labor costs by eliminating duplicate manual tasks and delays. As their winemaker Keith Emerson put it, vintrace “gave me more time to be a winemaker, to walk the vineyards, and to taste the ferments,” instead of chasing paperwork. When your team isn’t stuck doing admin on overtime, they can focus on making great wine and delivering great experiences – which is exactly where you want them during a tough market.

Tracking costs and boosting margin awareness.

In flush times, it’s easier to gloss over where money leaks out. Not now. I’m encouraging wineries to scrutinize every expense from grape to bottle. One UK producer, Itasca Wines, recently shared that “if you can measure it, you can manage it” – they track the cost of every item and every operation in vintrace so they can spot where they’re falling short and identify waste to cut. This kind of granular cost tracking is like turning on the lights in a dark room; suddenly you see, for example, that a certain wine’s packaging cost is 10% higher than it should be, or that you’re paying overtime every Friday because of how tasks are scheduled. Armed with that info, you can make changes – negotiate better prices, tweak your processes, or schedule work differently to avoid the overtime. Another winery realized their old compliance and record-keeping process was soaking up an entire employee’s week every month. They automated it, and 40 hours of work dropped to about 5 minutes. Think about that – an extra week of productivity gained, at essentially no extra cost. When you’re trying to do more with a smaller team, freeing up dozens of hours with a smart software upgrade isn’t a luxury; it’s a lifeline.

Better scheduling and resource allocation.

One practical upside of software is that it excels at planning and reminders – areas where humans often struggle, especially when we’re stretched thin. Modern winery management tools let you plan and schedule your fruit intake, fermentations, and bottling runs with ease, ensuring you run at optimal capacity and nothing important slips through the cracks. I’ve seen wineries create a digital harvest calendar that all departments can see; suddenly, everyone knows the game plan for the day, what fruit is coming in, which lots are being pressed, and when the bottling line is running. The cellar team can even get automatic notifications on their phones for their next tasks. Instead of chaos, harvest becomes a coordinated dance. Equipment downtime drops, and people aren’t standing around confused about what to do next. In short, fewer hands can accomplish the same workload without burning out, because they’re working smarter. One Australian winery told us that by scheduling work and capturing data in real time, they not only saved countless hours of data entry, they also avoided duplicate purchases of supplies and even reduced harvest overtime to near zero. Fewer bottlenecks and better communication make a huge difference – not just to the bottom line, but to team morale as well.

All these improvements – from cost visibility, to mobile workflows, to proactive scheduling – add up to real dollars and hours saved. And importantly, they’re not just about cutting costs; they’re about investing time in the right places. When you’re not firefighting operational issues or drowning in spreadsheets, you can devote attention to strategic things: nurturing your wine club relationships, developing a new DTC marketing campaign, experimenting in the vineyard for better quality, or scouting bulk opportunities (there are plenty out there in a glut). Efficiency isn’t about making people work faster like machines; it’s about removing the obstacles that prevent your talented team from doing their best work.

Looking Ahead: Turning a Downturn into a Launchpad

Walking through wineries these days, I’m actually struck by a sense of camaraderie. Yes, the pressure is on, but there’s a feeling that “we’re all in this together” – and that by sharing best practices and innovating, we’ll get through it. I firmly believe that a downturn can be a launchpad. It’s a chance to implement the systems and habits that will make your business more resilient for the long run. The Silicon Valley Bank report bluntly noted that the wine industry’s demand downturn is reversible if we adapt and target the right consumers. I’d add that operational resilience is part of that equation too: the leaner and more nimble our wineries, the better we can handle whatever the market throws at us.

At vintrace, this philosophy is at the heart of what we do. I co-founded vintrace after seeing how much even mid-sized producers could improve by moving beyond “good enough” tools - a belief shaped by years of collaborating with winemakers across regions and styles and embracing a smarter way to work. Today, with all the headwinds out there, that mission feels more important than ever. We’re not just software providers - we’re partners who want to help you gain clarity and control over your operations so you can make informed, confident decisions.

If you’re reading this and some of these challenges hit close to home, I encourage you to explore what vintrace can do for your winery. In tough times, you need actionable insights and tighter execution. Our customers have achieved everything from 5x faster compliance reporting to 50% cuts in harvest labor costs – and it’s not because they worked harder, but because they equipped themselves with better tools and processes. We’d love to help you do the same.

Ultimately, “doing more with less” isn’t just a survival mantra – it’s a strategy for long-term success. The wineries that use this period to get their house in order will be the ones best positioned to thrive when the market rebounds. And it will rebound. Wine has been around for thousands of years, surviving countless downturns, wars, and recessions. This chapter will be no different. The vines will keep producing; our job is to ensure we’re running smart, sustainable operations that can turn those grapes into great wine efficiently and profitably.

So let’s roll up our sleeves and make the most of this time. Trim the excess, fine-tune your processes, invest in your team’s skills and the right technology. You might just find that a leaner, smarter winery not only survives a downturn, but comes out of it better than before. And if you need a friend and a guide on that journey, vintrace is here to help – feel free to reach out for a chat or a demo. In the spirit of doing more with less, let’s work together to ensure that when the next boom comes, your winery is ready to crush it (pun very much intended).

- Joshua Abra, Co-founder of vintrace