Archive for January, 2010

Two-Buck-Chuck Wine: Are Volume-selling and Exclusives Still Relevant Channel Strategies?

By Beth Vanni, Director, Market Intelligence

I have had the good fortune to marry into a large Italian family — a family of fantastic cooks with very sophisticated palates and a great appetite for good wine. During a conversation with my father-in-law over the Christmas holidays, we discussed what constitutes a good table wine. He reminisced about how his father and grandfather always had a big jug of a (mediocre) Cabernet and drank two glasses with every meal. He lamented, despite his current financially comfortable position, how most families can’t afford a good $25-30 bottle of wine at every meal and how there’s a great market to be had for affordable daily wine. The conversation then led to a retailing phenomenon in the wine business that had caught his attention, and the attention of his other wine-purist (dare I say “snob”) friends.

He called it “Two Buck Chuck” wine, available at Trader Joe’s (a west coast specialty grocery chain). The real wine label is Charles Shaw, a label owned by Bronco Wine Co., currently the 8th biggest wine producer in California. Fred Franzia, the company’s President and a shrewd entrepreneur, has the west coast Napa Valley wine vintners up in arms selling a case of his signature Merlot or Syrah for $1.99 per bottle.. yes, $2.00 per bottle. Under $25.00 for a full case. The Charles Shaw label is sold exclusively by Trader Joe’s stores. Bronco sells 72 million bottles of Charles Shaw label wine every year. Says Frazia, “we had the brand, and the other growers had a huge supply of high-quality wine.” And consumers LOVE it — it’s flying off the shelves at Trader Joe’s by the case. The quality is consistent and more than palatable for non-snob wine consumer, and it’s getting strong ratings including a 10/10 rating from http://www.CheapWines.com. So, what’s the relevance of all this to IT products being sold through indirect channels? A fair question… let me explain. (more…)

January 11, 2010 at 9:23 pm Leave a comment


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