Two Buck Chuck is the nickname for the Charles F. Shaw varietal sold only at the Trader Joe's retail chain for $1.99 in California and $2.99 outside the state. Alone, Two Buck Chuck added a full half of a share point to the U.S. wine market, according to yet-to-be-released data from M. Shanken Communications' Impact. "It's expanding the market" by drawing new drinkers, said Frank Walters, director of research, Impact.
But it isn't just Bronco Co.'s Two Buck Chuck shaking up the market, which is booming with a record number of barrels sold last year. A number of vintners are introducing lower-price brands, while a greater share of category sales are now being conducted in mass-market outlets such as supermarkets and drug stores. Imports, too, are riding the wave, with sales on the rise.
Mr. Walters said it's too early to determine whether the phenomenon of good-enough wine at a very good price is limited to Two Buck Chuck. Already, supermarket chains, including Safeway and Albertsons, are reported to be exploring private-label varietals in the ultra-low price category, long a declining segment of the market.
Constellation Brands' Canandaigua has 18 wine labels selling at price points not that much higher than Two Buck Chuck. Those $12-and- under brands include long established names such as Almaden, Inglenook, and Paul Masson, as well as newer varietals, such as Australian entry Alice White, California labels such as Vendange and Talus, and Washington State wines such as Covey Run and Columbia.
"We have commissioned an [Information Resources Inc.] study so we can understand the consumer buying this wine," said Mike Jaeger, group president-table wine division, Canandaigua Wine Co., a division of Constellation brands.
no firm fix
Not even Two Buck Chuck's parent company has a firm fix on the brand's consumer, according to wine consultant Harvey Posert, who has done work with Two Buck Chuck. He said the brand's consumer is someone "willing to risk $2" and serves the wine "to people who don't buy wine at all. It's got to help the industry grow."
Some California vintners hope it will draw consumers away from beer or ready-made drinks. "At the end of the day, if it brings new people into the category it could only be a good thing-a service doing as much as advertising," said Robert Celsi, VP-strategic brand marketing, Trinchero Family Estates, which produces brands including Sutter Home.
Few of the lower priced brands, in fact, command sizable advertising budgets. Constellation Brand's Talus received $378,800 in measured media spending last year, while Columbia Crest was supported with $238,500. Sutter Home was the exception, with $4.2 million in advertising last year. The Bronco Co. spent only $108,000 during the period.
Many wine marketers believe Two Buck Chuck will flame out because it is bottling a higher quality product for its price thanks to the current glut of California wine. But Two Buck Chuck's Mr. Posert thinks that's wishful thinking from competitors, saying it will continue to benefit from an expected wine glut worldwide.
The Two Buck Chuck phenomenon also is a result of wine's move into the mainstream of package-goods. About one-third of wine sales come from warehouse clubs such as Costco, discount and drug stores and supermarkets in the 33 states where sale at those venues is permitted, according to IRI data. Retailers are also working to make wine purchases easier. Target's SuperTarget stores, for example, stocks its private-label Archer Farms brand and is trying to demystify the buying process with an in-store "wine wheel."
According to just-released data from wine consultant Gomberg Fredrikson, the overall U.S. wine market grew 6% last year to an all-time high of 595 million gallons.