(CNBC) - A vicious, four-year drought may be close to catching up with California's winemakers, and it's the small producers of inexpensive wine that are likely to be hit hardest.

The California drought has left some vineyards with a fraction of their usual water allotment. State Water Project allocations hover around 20 percent of normal, while the San Joaquin Valley irrigation districts are delivering no more than 30-35 percent of normal supplies, according to Jay Lund, professor and blogger for the University of California-Davis Center for Watershed Sciences.

For the first nine months of 2014, shipments of wines below $7 per bottle slid 2 to 3 percent, while more expensive wines saw double-digit growth, according to a 2015 industry update by the Allied Grape Growers, a California-based trade organization.

"The American consumer of wine is trending his or her wine buying to $10 and above, and that is great for many winery brands," President Nat DiBuduo wrote in the report. "The challenge again this year will be wines selling at $7 and below, as that price segment is retracting in volume. That market and those growers may face another difficult year in 2015."

"The quality may be dropping soon—you want to buy (good vintages) and have them for a couple of years. They may disappear someday. You want to have them before that." -Keith Wallace, founder, Wine School of Philadelphia

So far through the current drought, as thirstier crops have withered, hardy grapevines have continued to flourish. Experts like Wallace, however, say a tipping point might be coming. An increasingly crowded beverage marketplace was already pressuring California vintners to reduce prices, said Keith Wallace, founder of the Wine School of Philadelphia, an institution that trains winemakers, sommeliers, importers and other industry professionals.

Meanwhile, the drought is pushing up costs for producers. To keep prices attractive, winemakers have cut costs or faced losing their customers to foreign wines or craft beers