A California wine cap maker is laying off more than 60 employees at a Modesto facility.
The company, G3 Enterprises, said the challenges faced by the broader wine industry — declining consumer demand, inflation, rising expenses and increased competition — prompted the cuts.
“Like many companies in our industry, we have experienced changes in customer purchasing patterns and production volumes,” Laura Bream, the company’s vice president of human resources, said in a statement. “While these changes have contributed to the need for restructuring, they reflect broader market dynamics affecting the entire wine sector.”
In total, 66 workers at the site, most of whom work in closure operations, will be laid off between Oct. 6 and Dec. 31, according to the Worker Adjustment and Retraining Notification letter the company filed with the state last week. The company expects the layoffs to be permanent, according to the letter.
Bream said the Modesto facility, which finishes and manufactures several types of beverage closures, will remain in operation. The planned layoffs are only for jobs related to wine screw caps, she said. The facility plans to continue making other types of screw caps, capsule and Diam cork closures.
The Modesto Beefirst reported on the layoffs.
G3 Enterprises’ website boasts that it has more than 2,000 customers across the food, beverage and real estate industries; under that, it prominently features the logos of Gallo, the vodka seltzer brand High Noon, and New Amsterdam Vodka. Gallo owns both High Noon and New Amsterdam Vodka.
G3 Enterprises was formed in 2003 following the merger of a trucking company, an aluminum closure maker, an agricultural transport company and a label printing company, according to the company website. The “G3” in the company name references a nickname for the third generation of the Gallo clan, but Gallo and G3 Enterprises are legally independent companies, Bream said.
The company provides “integrated packaging and logistics solutions to the wine industry, from grape to glass,” according to the website, and offers a range of agricultural supply chain services, such as almond transportation, rice trucking and fertilizer transportation.
It has been a trying year for the wine industry. Gallo earlier this year shared plans to lay off more than 90 employees by the end of January 2027 and close a major Napa Valley wine-making facility.
In February, alcoholic beverage behemoth Constellation Brands announced plans to lay off 212 workers at its Mission Bell Winery in Madera. The publicly traded company, which owns Robert Mondavi wines and Modelo and Corona beers, has set a goal of $200 million in cost savings by 2028 and is shifting away from wine to focus more on its growing beer business, its financial filings show.
That month, Santa Rosa-based Foley Family Wines & Spirits wound down operations at its Chalone Vineyard in Monterey and laid off the entire wine-making staff at Chalone, though it plans to keep producing the Chalone label wine that was enjoyed by Julia Child, the San Francisco Chronicle reported.
At the heart of the wine industry’s crisis is a basic supply and demand problem: too many grapes and not enough buyers, industry experts told The Times this year.
Consumer demand is shrinking because boomers — the industry’s biggest fans — are aging out of the wine market. Younger generations drink less alcohol in general and are less likely to choose wine. The wine industry has lost drinkers to premium beers and spirits.
“At this point, the entire industry, and it’s not just California, recognizes that there’s a consumer change,” Rob McMillan, wine business analyst at Silicon Valley Bank, said about the wine cap layoffs.
Consumers have lately favored premium wines, which sell in lower volumes, McMillan said. Lower-priced categories, which sell in higher volumes, have performed poorly. Makers of corks, capsules and bottles have been hit because overall U.S. wine volume has continued to decline, McMillan said.
But there may be hope ahead.
“We’re starting to get near the bottom,” McMillan said, adding that he believes the U.S. wine industry should stabilize in the next two years.
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