The wine industry has been on a tear for two decades. Where once Napa wines were so second-rate they had to pay Orson Welles to try and gain credibility, the California landscape is now dotted with vineyards.

That may be coming to an end due to demographics; the same people drinking wine then are drinking it now, but they are 20 years older. The recession has not impacted the Boomer crowd much yet, older people who drink wine have IRAs, but the median age for them is now 66, and younger people are not taking it up as much. Costs are showing no signs of slowing down and everyone thinks wages should be higher - until their indulgences get more expensive.

One reason younger people have left it behind, according to the Silicon Valley Bank’s State of the U.S. Wine Industry Report, may be Neo-Prohibitionism by groups like MADD and WHO that made its way into government policy. And public perception.  European women are mystified that American women believe if they have a glass of wine during pregnancy they will get a birth defect, when European women don't have more birth defects unless they binge-drink into oblivion.

All of these add up to headwinds the report does not see the wine industry tackling, they are too busy thinking of new ways to undercut their neighbors.