Can’t Get Too Much Two Buck Chuck

By Elizabeth Lee, The Atlanta Journal-Constitution

Jan. 20–On any given Saturday at Trader Joe’s in Sandy Springs, shoppers pile their carts with bottles — and sometimes cases — of Two Buck Chuck.

The Charles Shaw wine, at $2.99 a bottle, is a top seller and best-known attraction for the California-based chain, which started opening stores here last fall. Thanks to a provision in Georgia law, it’s selling briskly at some competitors, too, from Green’s in Midtown to a Publix in east Cobb.

“Before Trader Joe’s got here, the hype around that wine was incredible,” says Harry Gregory, general manager of Bullock’s Wine & Spirits in east Cobb.

Not shy about latching on to a product with a built-in fan base and oodles of free publicity, Bullock’s decided to stock up. During the holidays, it offered the wine for $2.49 a bottle. (Now it charges $2.88.)

“We’re having people that are buying 10 to 15 cases at a time,” Gregory says.

The California product is a “value wine,” promising not only a cheap price, but also a better-than-expected taste. Like almost all of Trader Joe’s merchandise, it’s a store brand.

Trader Joe’s spokeswoman Alison Mochizuki declined to comment on how sharing one of its marquee products has affected operations in Georgia. The privately held grocer does not disclose sales figures.

Wineries for years have battled Georgia’s alcohol laws, which limit direct shipments from out-of-state wineries to residents. The laws also require wholesalers to make the wine they distribute available to any retailer — and that’s what puts Trader Joe’s store brand wine in the hands of competitors. Those are examples of overregulation, says Bill Nelson, president of Wine America, a trade group.

Still, analysts say Trader Joe’s stands to benefit through profits on sales to other retailers and by increasing name recognition. The design of the Charles Shaw label changed recently to add the Trader Joe’s name.

On balance, though, it seems bad business for Trader Joe’s, says Jan-Benedict Steenkamp, co-author of “Private Label Strategy” (Harvard Business School Press). Wine is one of Trader Joe’s destination products. Once in a store, customers will buy other things, too, Steenkamp says. But not if they pick up that destination product somewhere else and never get to the store.

“It weakens Trader Joe’s competitive edge in the marketplace,” he says.

At the Publix in east Cobb’s Woodlawn Point shopping center, competition is what it’s all about. Trader Joe’s is opening its fourth metro store on Friday less than a mile away. The store, the only Publix selling the wine, recently set up a large display of dozens of cases of Charles Shaw wine, with a “Two Buck Chuck” sign cluing in shoppers who might stroll by unaware.

“If our customers feel that a low-tier wine is appealing, then we want to make it available, as any other retailer would,” says Publix spokeswoman Brenda Reid.

That doesn’t sit well with Pete Dingeldey of Lawrenceville, a devoted Trader Joe’s shopper who buys private-label coffee, cereal, almonds and other products, with wine as an afterthought.

“It’s inappropriate for Publix to trade on the brand that Trader Joe’s has developed over time,” Dingeldey says. “I don’t think Publix would appreciate it if Trader Joe’s started selling Publix brand merchandise.”

Julie Dolan of Decatur isn’t as concerned. She’s tried Charles Shaw wine before and wasn’t impressed.

“I’m not going to go out of my way to get it,” Dolan says.

Still, for about $3 a bottle, many Atlantans are willing to judge for themselves. Other stores are taking notice. Kroger, for example, recently started selling Nathanson Creek wines for $2.97 a pop.

Michael Bishop, wine buyer at Green’s, likens the thirst for Two Buck Chuck to demand for Coors beer, which for many years wasn’t sold east of the Mississippi River.

“We’d had requests for Coors for 10 years, and when it finally became available back in the ’80s, it sold like crazy for six months,” Bishop says. “Then it died down.”

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