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Two-buck Chuck

Posted by clarkjohnsen on April 30, 2003 at 11:27:40:
For $2, a Bottle of Wine and Change
By FRANK J. PRIAL

MOVE over Mondavi. Step aside Gevrey-Chambertin. And Grgich Hills, get lost.
Make way for Two-Buck Chuck, at $1.99 a bottle the hottest thing in the wine
market since, well, since nothing. There's never been anything like it.
The wine's real name is Charles Shaw. It's a year-old line of California
wines produced and bottled by the Bronco Wine Company of Ceres, Calif., and
sold only in Trader Joe's stores, of which there are 193, most of them on
the West Coast. The Two-Buck Chuck nickname is said to have come from a
Trader Joe's employee who, one hopes, was quickly made a marketing director.
These Charles Shaw wines first appeared last spring, with three vintages -
1999, 2000 and 2001 - arriving simultaneously. But it wasn't until late fall
that sales started to move. "They were doing 350, 500 cases a day in some
stores," said Jon Fredrikson, a California wine consultant. "By the end of
the year, they'd sold almost two million cases."
Tales abound of how, as the holidays approached, customers carted off 10 to
15 cases at a time in their S.U.V.'s. They would buy a bottle, them come
back for cases, said one manager of a Trader Joe's store in Emeryville,
Calif. Sales of Two-Buck Chuck could reach five million cases this year, Mr.
Fredrikson said, adding: "It's the fastest-growing table wine in the U.S.
wine industry's history. Here in California, they are currently outselling
all the Gallo labels combined."
Harvey Posert, a public relations consultant working for Bronco, said:
"We've never seen anything like it. It's sort of a reverse cult wine."
So-called cult wines like Screaming Eagle and Grace Family Vineyards are
produced in tiny quantities by small wineries and sold at astonishingly high
prices. Two-Buck Chuck appears to have reversed the process by attracting
thousands of customers who ordinarily pay much more for their wine.
Suddenly, it's chic to boast that you are serving a $2 wine.
Wine chat rooms on the Internet quickly took up the Two-Buck Chuck story and
are credited, at least in part, for the wine's rapid rise to fame.
Two-Buck Chuck is a phenomenon of the current California wine market, which
has been hard hit by the economic downturn and is trying to rid itself of an
ocean of surplus wine. The wholesale price of bulk wine, as high as $10 a
gallon in the late 1990's, was down to about $1 last year.
Bronco's president, Fred Franzia, has made a success of picking up the
labels of bankrupt or otherwise dormant wineries and using them on lines of
inexpensive wines. Among the has-beens whose names he owns - in addition to
Charles Shaw - are Grand Cru, Hacienda, Rutherford Vintners and Napa Ridge.
Napa Ridge is in Napa but its wines are made from bulk wine trucked in from
other parts of California. Charles Shaw wines are bottled at Napa Ridge.
Several years ago, the Napa Valley Vintners Association sued Bronco for what
it contended was the illegal use of the "Napa" name on wines "bulked in"
from elsewhere. The vintners lost.
And many California vintners seem to be losing again, as Mr. Frederikson
said that the $1.99 bottle has taken business away from other wineries.
CHARLES F. SHAW was a Chicago investment banker who fell in love with the
wine business and, in the late 1970's, bought 50 acres off the Silverado
Trail in the Napa Valley. There, he planted gamay grapes to make a
California version of Beaujolais. The Charles F. Shaw Vineyard and Winery
opened for business in 1979.
Eventually, Mr. Shaw was making 10,000 cases a year of gamay and sauvignon
blanc. But a dozen years later, after his gamay gamble had met with little
success in cabernet country, Mr. Shaw declared bankruptcy and returned to
Chicago. Bronco stepped in and bought the name, keeping it in deep freeze
for about another 12 years.
There are four wines now in the Charles Shaw Two-Buck Chuck line: cabernet
sauvignon, merlot, chardonnay and sauvignon blanc. They are all priced at
$1.99 in California's Trader Joe's stores. In the chain's stores in
Washington and other states, the wine has often been priced at $2.99.
Two-Buck Chuck has been compared with Franzia three- and five-liter
bag-in-the-box wines but, in fact, those wines are not made by Bronco, but
by the Wine Group, another big California company, which some years ago
purchased the Franzia name.
The Charles Shaw wines are relatively dry for inexpensive wines. This puts
them in competition with more sophisticated table wines rather than the
bag-in-a-box wines. The cabernet, the only one I have tried, is light,
pleasant and easy to drink and has little varietal character. It could have
been merlot for all I knew. Nondescript would not be too harsh a
characterization. Nothing wrong with that: wine is supposed to accompany
food and Charles Shaw will do that quite adequately. Someone referred to it
recently as the ultimate fund-raiser wine - perfect for large groups of
people who really don't care what they are drinking.
No one is sure how long the Two-Buck Chuck phenomenon will last. Bulk wine
prices have climbed to as high as $1.50 a gallon in recent weeks, but as Mr.
Posert of Bronco noted, there is a wine glut all over the world working to
keep prices down. He sees the Charles Shaw wines doing well for another two
to five years.
The wines quickly spawned competitors, the most interesting of which happens
to be called, yes, Two Buck Chuck. The difference is that with the Charles
Shaw wines, Two-Buck Chuck is merely a clever, informal nickname. Two weeks
ago, the new Two Buck Chuck appeared in California, at the stores of a chain
called Beverages & More. Only this second Two Buck Chuck was registered with
the Bureau of Alcohol, Tobacco and Firearms as a legitimate proprietary
name.
This other Two Buck Chuck is made at the Adler Fels winery in Santa Rosa,
Calif., which also bottles private-label wines for chain stores. The
winemaker David Coleman said that Beverages & More had asked him to make the
wine some months ago and that he had had no idea someone else was using the
name Two Buck Chuck. Mr. Coleman said he doesn't see the $2 wine phenomenon
lasting more than "three or four months." He now has a 2000 cabernet
sauvignon and a 2001 chardonnay.
In the meantime, he told the Wine Business Insider, a trade publication:
"It's amazing how much wine is out there and how inexpensive it is. I wish I
could run my car with it."