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Charles Shaw
 

Charles Shaw


  Charles Shaw
cheap swills
by Diane O'Brien
June 23, 2003

What's red and white with blue-collar prices? At two bucks a pop, the American wine brand Charles Shaw is. This newcomer from Napa Valley has taken on the world of battling wine brands, and emerged on top. It has created a cultish following of consumers, shifting palates from wine cellars to bargain basements.
 
 

It's hard to differentiate a bottle of Charles Shaw wine from its shelf mates. It comes in a traditional wine bottle, carries a standard label, and covers typical varietals such as cabernet, merlot, chardonnay and sauvignon blanc. But it does have one distinguishing feature: a US$ 1.99 price tag. It's also often found stacked on palettes, still in the case -- it sells out before it has a chance to be stocked on shelves.

Two Buck Chuck, as it has come to be known, is a newcomer to the over 6,500 wine brands sold in the US. It debuted in late 2001, created a buzz in late 2002, and is pretty much a phenomenon at this point, mid 2003.

Its popularity, of course, has a lot to do with its low price -- boxed wine isn't even that cheap. But couple the price with the fact that even wine connoisseurs are dubbing it "not bad" and the result is a wide market of consumers, from experts with high-maintenance taste buds to budget-conscious consumers with high-maintenance overdrafts. The combination creates a wide market to snatch up the brand by the case.

Its history is short and simple. Charles Shaw, an investment banker with a passion for wine, came to Napa in the 1980s hoping to sell Beaujolais under his own name. It didn't happen. He left, and Bronco Wine, under CEO (and California wine tyrant) Fred Franzia (you might recognize his name from boxed wine) bought the brand name. Bronco Wine now controls 35,000 acres of vineyard in California and owns a number of wine brands including Forest Glen, Estrella, Montpellier, Grand Cru, Silver Ridge, Rutherford Vintners, Hacienda, FoxHollow, and Napa Ridge brands. Franzia labeled his two-dollar wine Charles Shaw.

The price reflects less on the quality and more on California's overabundance of grapes. With the dot-com boom in full effect in the 90s, vineyards were reaping the benefits and planting vine after vine. Now with little demand and a huge supply, good-quality, low-cost wine can be produced.

Two Buck Chuck is available only at Trader Joe's, an upscale chain of just under 200 grocery stores (mostly along the coasts). Although on the East Coast it's more like Three Buck Chuck since distribution costs jack up the price to about US$ 3.00 a bottle.

On both coasts, Trader Joe's is having trouble keeping the wine stocked as bottles are whisked out the door daily by the thousands. It has reached sales of a million each month and is quickly closing in on two million. By the end of 2003, itís estimated that six million cases of the wine will be sold -- readying the brand to surpass dominant wine brands like Beringer and Kendall Jackson, according to Wine Market Report.

To put Charles Shaw's success in perspective, compare it to these stats from The Wine Spectator: Out of 6,500 brands sold in the US, only 21 have sold more than one million cases in 2001, and another 21 sold between one and two million. Premium, well-known brands like Mondavi are predicting up to a 25 percent loss this year.

Charles Shaw has done this all without an ounce of marketing or advertising. It hit the right target at the right time, with a good product (unlike boxed wine, Chuck is dry like more expensive wine -- no sugar added), and created a sophisticated package instead of dumping it in a tacky box. And although there are mixed reviews on taste, no one has dissed it yet -- including mentions in The New York Times, MSNBC, and The Wine Spectator. It's also made the press worldwide, from the UK to Australia and appeared at the London International Wine & Spirits Fair held this past May.

Charles Shaw may just be a taste of super-value wine brands. There are a handful of wine brands in California that sell for about two dollars, which may indicate that the brand is leading a burgeoning trend.

Wine analysts say it's too early to tell whether bottled-water priced wine will be a hit. What we can count on is the surplus of grapes will even out at some point and the economy will turn around, the two big factors behind Two Buck Chuck and super-value brand wines. Curiosity factors in too -- how can you not pick up a bottle of wine with a catchy nickname (supposedly originating from a Trader Joe's employee) and price tag that's so low? But the curiosity could run out as quickly as the grapes.

For now, while super-value wine brands like Two Buck Chuck are stocked in stores, carpe diem -- which roughly translates as: drink up while supplies last.

 
     
  

Diane O'Brien lives and works (and drinks) in Manhattan.

  
     
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