Charles Shaw had a vision. He was going to bring the Gamay grape, best known in France for Beaujolais, to California’s Napa Valley. In doing so, he would offer the U.S. an alternative to Cabernet Sauvignon and Merlot — and conquer the wine world.
“Charles Shaw was very, very serious about what he was doing,” says Chuck Hayward, a long-time northern California retailer and importer, who sold Shaw’s Gamay. “Back then, you had two kinds of winemakers, and neither was right or wrong in approach. They just did what they did. There were those who were showmen, like Randall Grahm and Jim Clendenen, and those who were almost academic. That was Charles Shaw. He was going to convince you, by explaining to you, why Gamay was the best grape for what he was doing and why it was going to work.”
All of which happened — without Shaw.
Shaw’s self-named winery went bankrupt in 1995, but his legacy has lived on. Today, it’s the name on the label of Trader Joe’s legendary Two Buck Chuck — the $1.99 wine made by the Bronco Wine Co. that has sold almost 1 billion bottles since 2001.
The wine juggernaut
Two Buck Chuck was the first cheap wine that didn’t come in a jug with a screw cap or an awkward box. Instead, it came in a 750ml bottle with a cork-style closure, just like real wine. It also came from a real retailer, and not some dingy store with dusty shelves and poor lighting. Quality, though notoriously inconsistent, was usually a notch above the jug and boxed wines of the era.
The prospect of being able to buy a quality, bottled wine at such a low price galvanized wine drinkers. Those who didn’t have a Trader Joe’s in their town — and 20 years ago, there were few locations outside of southern California — made pilgrimages to the nearest store, to stock up on entire cases. Wine professionals couldn’t figure out how such a cheap wine could be so popular.
This is far from what Shaw imagined when his winery opened in 1979. He was, says Hayward, convinced that he could change the way Americans drank wine. Beaujolais was becoming popular in the U.S., and Beaujolais Nouveau, a simpler version released every year around Thanksgiving, was gaining in popularity, too. These wines were inexpensive, fruity, easy to drink, and almost no one in California was making anything like them.
A domestic version seemed to be exactly what U.S. wine drinkers were looking for. Except, they weren’t. Charles Shaw’s winery grew to 50,000 cases by the early 1990s, an impressive total for the time but not enough to turn his Gamay into a national brand. Throw in double-digit interest rates, a recession, a highly-leveraged business, and a crumbling marriage, and bankruptcy was inevitable. When that happened, one of California’s most notorious wine entrepreneurs, Fred Franzia, staked his claim to Charles Shaw.
Franzia’s Bronco Wine Co. was known for buying the name, label, and logos of high-end wineries that went bankrupt, according to Hayward. Then, it would use the names for inexpensive Bronco-produced wine, taking advantage of whatever marketing value was left. Bronco did this in the early 1990s with Hacienda and Grand Cru wineries in Sonoma. So, it wasn’t unusual that Bronco picked up Charles Shaw for some $25,000. What happened next was.
Bronco and Trader Joe’s agreed that the former would make Charles Shaw wine exclusively for the latter, a retail concept known as private label. Private labels were common in other products — Kenmore appliances, for instance — but were less used in wine. Additionally, the wine would sell for $1.99, which was possible thanks to Bronco’s economies of scale, low distribution costs, and large vineyard holdings.
How did the companies agree on the $1.99 price? Where did the nickname come from? Why did they choose a private label? Did anyone at Bronco or Trader Joe’s expect what happened next? Who knows? Neither Bronco or Trader Joe’s responded to requests for interviews for this story.
What’s certain is that Two Buck Chuck caught the wine world by surprise.
It changed the world of wine
“The success of the brand just came out of nowhere,” says Bill Rich, then a Dallas retailer and wholesaler. “None of us had ever seen anything like it — not just the price, but the marketing. It kind of set the bar for everyone else.”
The wine sold furiously. Trader Joe’s also figured out how to make the wine about more than the price. For one thing, the grocer’s customers were loyal and passionate. If it sold a wine for $1.99, customers figured it was worth buying. For another, Trader Joe’s made it almost impossible to not want to buy the wine, with huge signs and cases stacked throughout the store.
This approach was so successful that it spawned dozens of new, low-cost wines, including E. & J. Gallo’s Barefoot, along with many private labels. Today, private label wines are common not just in wine and grocery stores, but also in restaurants and hotels.
Trader Joe’s, however, never really repeated Two Buck Chuck’s success, even though much of the wine it sells today is private label. Neither has Bronco. A Two Buck Chuck-like brand aimed at restaurants, launched about a decade ago, came and went.
But almost 20 years later, Two Buck Chuck is still here. It still sells for $1.99 in California, though it has risen as high as $2.99 over the years, while shipping costs have raised the price elsewhere in the country to as much as $3.99. Still, even at that price, it costs about half as much as the average bottle of wine. Those 1 billion bottles work out to about five for each person in the U.S. old enough to drink — not bad for a $2 wine.