Before the Bank Calls: What Wine’s Debt Reckoning Means for Business Leaders

The wine business has a debt problem, and it is no longer quiet about it.

Bankruptcy filings, lender-forced sales and quiet wind-downs have moved from the edges of the industry to the center. Family estates, private-equity roll-ups and mid-sized brands with national distribution have all been caught. The common thread is rarely bad wine. It is leverage taken on for a market that no longer exists.

I have watched this movie from the operator’s chair. Most of these endings were not inevitable. They became inevitable because the people who could have changed the story — the owners, boards, and lenders — waited until the options were gone.

This piece is for them. It covers what is driving the distress, the warning signs that show up 12 to 24 months before a crisis, and what to do while you still have choices.

How we got here: cheap money met a shrinking market

The numbers are blunt. U.S. wine revenue was about $94 billion in 2020 and fell to $74.3 billion in 2025, a drop of almost 21%. Volume slid to 329 million cases in 2025 from 335.9 million the year before (Silicon Valley Bank, State of the U.S. Wine Industry 2026, via TheStreet).

The demand problem is structural, not cyclical. Boomers, the category’s core buyers, are drinking less and aging out. Consumers under 30 drink less than any comparable group on record. SVB expects total demand to bottom in 2027 or 2028 before modest growth returns. That means at least two more years of a shrinking pie.

Now layer on the capital structure. Through the late 2010s, many wineries bought land, built facilities, planted vineyards, and grew inventory on the assumption that premiumization would carry them. Money was cheap. Starting rates on wine industry loans were below 4% in 2021; in 2026 they run 6% to 8.5%, according to M&A advisor Azur Associates (San Francisco Chronicle). Some borrowers fared far worse. One Napa estate saw its rate climb from 4.75% to 12.6% over six years.

One recent bankruptcy filing described the trap precisely. When operating earnings fall, leverage becomes unsustainable even if the debt never grows. The land, the barrels and the brand are still valuable. They are simply attached to a business that cannot service yesterday’s debt from today’s cash flow.

Then add the accelerants: tariffs and trade uncertainty, higher costs for glass, grapes and freight, wildfire risk, softer tasting-room traffic and distributors trimming their books. Lenders who were patient partners for a decade are now tightening covenants, raising rates and, in some cases, pushing toward foreclosure.

This is not a story about bad operators. Some of the most respected family names in wine are in bankruptcy court right now. It is a story about balance sheets built for a market that no longer exists.

The warning signs arrive early. Most people explain them away.

Distress rarely shows up as a single event. It shows up as a series of small, reasonable-sounding explanations. “It was a tough vintage.” “The distributor is resetting.” “The club will come back.” By the time the lender calls, those explanations have usually been running for 18 months.

These are the signals I look for first:

• Inventory outpacing depletions. Cash gets trapped in tanks and warehouses while the balance sheet still counts it at full value.
• A line of credit that never comes down. A maxed revolver is no longer working capital. It is permanent debt at a variable rate.
• Routine covenant waivers. One is a conversation. Two in a row is a pattern your lender is already documenting.
• Discounting to hit volume. The top line holds while margins erode underneath.
• No 13-week cash view. If leadership cannot say what cash looks like in week 10, the business is flying blind.

Nearly every one of these traces back to the same root cause: controls that loosened when times were good. A business can never skimp on financial and internal controls, even in the best of years. Cash forecasting, inventory reconciliation, covenant tracking, and honest monthly reporting are not overhead. They are what let you see trouble while there is still time to act.

Lessons from the operator’s chair

In March 2020, I was running a brewery when on-premise sales disappeared almost overnight. Taprooms closed, and keg accounts went dark. We had payroll, debt service, and perishable inventory, and no playbook.

We came through it in good shape, and not by being optimistic. We made hard calls fast. We built a weekly cash forecast and managed to it every Monday. We cut SKUs that tied up cash, redirected production to the channels still moving, and kept our lender close with honest, regular updates.

I have also led from the other side. When the lead investor withdrew from a wine producer I was running, I took on a different kind of leadership: guiding the business through its wind-down. The job there was different: protect value for everyone at the table and exit in an orderly way, on our terms rather than a court’s.

Three lessons from both experiences apply directly to wine today:

1. Cash is the only truth. P&L and EBITDA can look acceptable while the bank account drains. Manage to cash, weekly.
2. Lenders respond to credibility, not hope. A lender who sees a realistic plan and management that hits its own forecasts will almost always give you more room than one who hears promises.
3. Speed beats perfection. Every month of delay removes an option. The choices available at month three are not available at month nine.

Those experiences are why I do this work. I have sat in the chair when the numbers turn, the team is anxious, and everyone wants a reason to wait. Waiting is almost always the most expensive choice.

Two kinds of help: before the crisis and during it

There is a real difference between a turnaround you choose and one that is chosen for you.

Before the crisis, you are still in control. This is where an outside operator adds the most value for the least cost. The work is practical: stress-test the balance sheet against realistic demand, not the 2019 plan. Build a 13-week cash forecast and a 24-month liquidity view. Rationalize SKUs and inventory. Decide which assets are core and which are simply expensive to own. Then go to the lender with a plan before they come to you with one.

Done early, this often means selling a non-core vineyard on your timeline, refinancing from strength, or resetting the cost base while the brand is still healthy. Owners keep more of the business and more of the legacy.

During the crisis, the job is triage. The goal shifts to protecting value and buying time. That means taking control of cash immediately, stabilizing the team and key accounts, and opening an honest channel with lenders and creditors. It also means laying out every path clearly, from a negotiated restructuring or recapitalization to a going-concern sale or an orderly wind-down.

Not every business can or should be saved in its current form. Sometimes the best outcome is a controlled exit that protects employees, growers, creditors, and the family’s name. An orderly wind-down managed by an experienced operator almost always recovers more value than a forced liquidation managed by a court.

In both cases, the most valuable thing an outside leader brings is objectivity. Management is too close. The family is too invested. The lender has its own interests. Someone needs to own the facts and the plan.

A word to boards and lenders

To boards and ownership groups: your job is to ask the uncomfortable question before the market asks it for you. Request a 13-week cash forecast at every meeting. Ask how inventory compares to 12 months of realistic depletions. Ask what happens to covenants if revenue falls another 10%. If management cannot answer quickly, that is your answer.

To lenders: you have seen what happens when a borrower hides from you until the last possible moment. Everyone loses value in a contested foreclosure, including the bank. An experienced interim leader or advisor, brought in early, gives you something you rarely get from a distressed borrower: reliable numbers and a credible plan. Recommending that kind of help is often the best way to protect your collateral and your relationship.

The borrowers most likely to recover are the ones whose lenders and boards pushed for outside help while there was still time to use it.

To CEOs: the moment you feel in control, you are not

This is the hardest lesson in this business. Confidence is an asset when you are building. When conditions shift under you, it becomes a liability, because it quietly filters out the bad news.

Most of the distress we see today did not start with a bad decision. It started with a reasonable decision made in 2019 or 2021 that nobody went back and challenged. The acquisition made sense. The expansion made sense. The loan made sense. Until it didn’t.

The fix is not more intelligence. It is more honest input:

• Use your board as a real check, not an audience. Bring them the downside case, not just the plan, and ask them to push back.
• Build a peer group of CEOs outside your company. Ideally, some outside wine, who have led through a downturn and will tell you what they see.
• Pressure-test big decisions before you commit. Have an experienced outside operator challenge any acquisition, expansion, or new debt before you sign.

Be especially cautious with leverage in a market still finding its floor. Every dollar you borrow today is a bet that demand, rates, and your lender’s patience will all cooperate. Ask the people around you whether that bet still makes sense, and listen when they hesitate.

Make the call before the bank does

The wine industry will come through this. Demand will find its floor, and the businesses that right-size now will be the ones buying assets at a discount in 2028. The question for every owner, board, and lender is simple: which side of that transaction will you be on?

At 2Go Advisory Group, we work with beverage and consumer packaged goods companies at both ends of that question. We help leadership teams get ahead of trouble with balance-sheet stress tests, cash discipline, and operating resets. When a business is already in distress, we step in with hands-on triage: interim leadership, lender negotiations, restructuring plans and, when it is the right answer, an orderly wind-down that protects value and reputation.

We are operators, not theorists. We have run the operations, managed the lenders, and made the payroll calls. We do hard things and do them well.

If any of the warning signs above sound familiar, or you are about to make a big decision, and no one has pushed back yet, call us. The best time to talk was six months ago. The second-best time is this week.

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For your Talent needs in direct hire, full-time or part-time contract staffing, in Food and Beverage and Consumer Products, contact Executive Recruiter, Leesa Meintzer at leesa@2gorecruiting.com.