Why Is Trader Joe’s Wine So Cheap?

Why Is Trader Joe's Wine So Cheap?

I came across the question “How is Trader Joe’s wine so cheap?” on Quora the other day and was curious. Are you?

The question on Quora was simple:

How is Trader Joe’s wine so cheap?

What are the economics of the Trader Joe’s Wine? The Charles Shaw Blend (aka the Two Buck Chuck) costs only $2.99. How do they produce wine at such a low cost? Is it “blended” from surplus/discarded source wines?

Its a good question.  People ask me similar questions about cheap wine all the time (hence, my blog posts Artisanal vs. Corporate Wine or Why the hell should I buy artisanal?  and How To Buy Good Cheap Wine). A few folks on Quora weighed in and shed some light on the Trader Joe’s Wine debate.

Chris Morrison, whose bio tells us nothing more than that he is from San Francisco, is somehow affiliated wit Evergreen State College and has 243 Quora followers, notes that Two Buck Chuck is produced by Bronco Wine, who is owned by Fred Franzia who comes from a family famous for its boxed-wine empire. Morrison goes on to mention a CNN Money profile of Franzia written in 2007 :

But Franzia’s main war – the one he’s kicking ass at – is against  pretentiousness. Bronco, which he owns with his brother Joe and cousin  John, has (including vineyard partnerships) 3,000 employees and does an  estimated $250 million in annual sales of mostly low-cost wines such as  Estrella, Forest Glen, ForestVille, Montpellier, and Silver Ridge. It  also gets income from providing distribution, bottling, and juice to  other wineries.

In 2002, Franzia persuaded Trader Joe’s to sell a  low-end label called Charles Shaw (after the winemaker who sold the tony  label to Franzia, and dubbed Two Buck Chuck by consumers) that waged  war on domestic wines in the $4 to $10 range – and was named best  chardonnay in a blind taste test at July’s California State Fair over  far pricier competition. The label is one of America’s fastest-growing, selling 5 million cases per year, all through one chain of stores.

Morrison clearly isn’t a fan of Franzia and goes on to make some disparaging remarks and show some unflattering images.

The next Quora contributor to add his two cents was Chris Knox, a Wine Shop Manager/Wine Buyer for BiN 2860 Wine Shop, a small boutique style wine shop and tasting room in Los Olivos, CA. Knox adds to the conversation by strongly agreeing with Morrison in his dislike for Franzia.  He also notes that Franzia is a “shrewd business man who sees it as his mission to pretty much remove any shred of pretentiousness (and dare I say integrity and quality along with it) from the wine world.”

Knox notes that Franzia started by buying the then failing Charles Shaw label years ago along with massive amounts of bulk wine in the 90’s for pennies on the dollar and a staggering 35,000 acres of land in the very cheap San Joaquin Valley which he then planted to vines. The vineyards are located in the Central Valley in California which is notoriously flat and quite hot producing massive yields of overripe grapes. Franzia planted those vineyards in such a way as the rows run north-south, giving the vines maximum sun exposure and he made the rows as long as he possibly could, minimizing the number of turns his tractors would need to make.

Like most mass produced wine, Bronco’s grapes are not hand-picked but rather they are machine harvested.  And that means large tractors go down the rows of vineyards grabbing the grapes. They not only grab ripe grapes, but unripe and rotten grapes, leaves, stems and rodents, birds, insects and whatever else is on the grapes and mixes them all together.

Bronco, like many if not most mass produced wine, then manipulates the finished wine by adding sugar or unfermented grape juice if needed to make the wine palatable.  And then the wine goes into bottling, packaging and shipping facilities, all of which Fred Franzia owns himself.  They then get put on trucks (also owned by Fred Franzia) and shipped to Trader Joe’s.Knox’s summary:

To make $2 wine one must compromise all sense of integrity and quality, own tens of thousands of acres of vineyards in the worst possible wine region possible where land is incredibly cheap and yields are exceptionally high, use machines to execute every part of a homogenized system that substitutes manipulation for hand crafted quality, and own every step of the winemaking process including bottling, packaging and distribution, all while giving the finger to the entire wine industry and plowing down anyone who gets in your way.

That’s quite an indictment. But, while I don’t quite understand why Franzia deserves such singular wrath, I do agree that cheap, mass produced wine is rarely fair to stakeholders such as workers and vendors, nor is it typically good for the local economy or rarely mindful of the environment. As I said in a blog post, Artisanal vs. Corporate Wine or Why the hell should I buy artisanal?, the higher cost of small winery wine goes straight into the quality of the wine. When going cheap, you really do get what you pay for.

Interested in learning more about how every decision made to improve quality of a wine comes at a financial cost? Read How Sustainability and Quality Go Hand in Hand to learn more.

Written by Jennifer Kaplan

Jennifer Kaplan writes about sustainable food and wine, the intersection of food and marketing and food politics for Insteading (and EatDrinkBetter.com before the two sites merged) and is the author of Greening Your Small Business. She is an Instructor at the Culinary Institute of America-Greystone and was named one of The 16 Women You Must Follow on Twitter for Green Business. She has four kids, a dog, a hamster, an MFA and an MBA – follow her on Twitter.

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