News you can talk about & Trends you can watch

In the News

How Trader Joe’s Sells Cheap Wine

July 3, 2015 – Some time ago, when Trader Joe’s Two  Buck Chuck was a $1.99, I used to run into a gentleman at a group I belonged to who would buttonhole me every time with the same question:  “How can Trader Joe’s make and sell wine for $1.99 a bottle”.  So I’d explain the wine was made by Bronco, a company with thousands of acres of land and vineyards in the inexpensive San Joaquin Valley, how there’s economy of scale when you are that huge, how they use cheap lightweight glass, and own the glass factory, cheaper corks, and so on.  He’d shake his head and mutter, “I don’t see how they can do it.”  We’d go through this routine every time I saw him.

So I’m hoping he caught a recent article from Business Insider posted on Yahoo! Finance explaining how Trader Joe’s sells Charles Shaw wines, nicknamed Two Buck Chuck by some wit, for $1.99 a bottle.  It’s actually now $2.49 a bottle in California but that’s still amazingly cheap.  So here’s the skinny taken from Hayley Peterson’s article in Business Insider:

New vines “as far as the eye can see” from the Bronco Facebook page.

Land is cheap in California’s Central Valley and Bronco owns at least 40,000 acres.

They use mechanical harvesters (as do a lot of higher end wineries).

They substitute oak chips for barrels.  No sin here.  I know of wines that sell closer to $10 a bottle that do the same.

They save money using lighter, cheaper glass saving on fuel in the trucks that the company owns.  To save a few cents, they switched from white cartons to brown paper cartons.

Bronco doesn’t economize by using plastic corks as many less expensive wines do.  They use a composite cork that is pieces glued together with a real cork veneer at the bottom.

They do not add sugar to improve the taste.  Chaptalization, the term for adding sugar, is illegal in California.

Definitely not your boutique winery from Bronco Facebook page

So, is the wine just horrible plonk made in a huge factory as some wine critics say? Eight hundred million bottles sold since 2002 indicates that the folks disagree.  One critic pontificated that if you want cheap wine, there’s good stuff around for $8 – $10.  Really?  What if you love a glass of wine or want to jazz up a beef stew but can’t afford to spend that much?  Wine snobbery needs to go.  Smart people in the wine industry would rather have the consumer drinking wine no matter the price or style.  So drink what you like and can afford.  I’ve bought a ton of Charles Shaw Cabernet Sauvignon.  I pretend it’s for cooking but I’ll confess, this chef drinks most of it!

Three loud hurrahs for Trader Joe’s for offering their customers a very drinkable wine for an outstanding price.

X