VINTNERS Cheap wine gives some sour grapes

Two-Buck Chuck, a cheap new wine, is selling even faster than it did last year.
LOS ANGELES TIMES
Most California winemakers were hoping it was a passing fad, one whose popularity would fade as quickly as the pet rock.
Their thinking was that consumers would either get tired of drinking $1.99 Charles Shaw wines or that manufacturer Bronco Wine Co. would run out of the low-cost grapes used to make it. One year after its debut on the shelves at Trader Joe's grocery stores, neither has happened.
In fact, demand for the wine -- affectionately known as Two-Buck Chuck -- is gushing. More than 2 million cases of Charles Shaw's varietal wines were shipped to Trader Joe's in the first four months of this year -- the same number of cases sold in the nine months it was on the market in 2002, according to the Wine Market Report.
In just the first two months of this year, Chuck took a 19 percent gulp out of total sales by volume of all the wine bought in California. Industry consultants Gomberg-Fredrikson & amp; Associates said that's the biggest share of the state market any single brand has owned in recent history.
Nervous retailers
Its success has made other wine retailers nervous. So much so that supermarkets such as Safeway, Vons, Albertsons and Raley's have begun stocking their own $1.99 labels.
Chuck "is really shaking things up," industry consultant John Fredrikson said.
Experts say Charles Shaw is helping to attract a number of new wine drinkers, something the rest of the wine industry hasn't been able to do in recent decades. They say it's also poaching sales from many makers of more expensive wines and forcing them to discount their goods.
Based in Ceres, Calif., Bronco Wine has taken advantage of the state's wine-grape glut that has sent prices plummeting. Buying excess grapes from vineyards around the state, it bottles its product at a plant in Napa. It has sold its four Charles Shaw varietals exclusively at Trader Joe's since April 2002.
What the vintner "has been able to do is start the process of eliminating the grape glut," said Chris Lynch, senior vice president of marketing for Allied Domecq Wines USA, the maker of Callaway Coastal and Clos du Bois.
But now, as prices for some types of wine grapes are rising, he said the question is: "Will they be able to sell $3 or $4 Chuck?"
Bronco officials wouldn't comment.
Many people in the industry are optimistic about the prospects for $1.99 brands.
Options
Rich Cartiere, publisher of the Wine Market Report, said the glut of Chardonnay and other white wine grapes is easing. But there still is an oversupply of many types of red wine grapes, giving winemakers plenty of options.
"If they are running out of Merlot, they'll just switch to Syrah," which is in large supply, he said. "They could go another two years on that."
Moreover, he said, if Bronco can't find affordable domestic sources, it could import bulk wine from Chile, Spain or other low-cost producing areas around the world.