Savvy_Gavi | Jan. 15, 2012 at 3:01 p.m. (report)

@durella and nmballa - direct shipping is illegal in Wisconsin due to our 3-tier system. The advantage that Whole Foods has is national presence combined with exclusive negotiating. They negotiate the price at winery level, then find a distributor to bring it into the state and sell it to them at the negotiated price. This usually upsets the distributor, by the way, who hardly makes any money on the wine. Fortunately for retailers, Wisconsin state laws include a franchise clause for distributing that guarantees the price be made available to everyone to reduce the probability of a chain making more profits than another. This also upsets the distributors, but don't feel to bad for them, they generally do pretty well.

JCMKE12 | Jan. 13, 2012 at 1:13 p.m. (report)

The reason IS: There is an enormous glut of wine in California right now. Because it takes 5-7 years after planting vineyards for the winery to be able to bottle wine - there is an enormous lag-time in response to demand. What we are seeing now is because there was a huge increase in planting vineyards in the late 90's and early 00's. Now that all of that acreage is producing, there is an ocean of wine. Lots of wineries bottle what they think they can sell, then sell off the remaining juice out the "back door" at a steep discount (wine they know they can't sell under their own label). That way they can maintain the pricing on their own label while at least making a little money on the juice they would have to otherwise dump down the drain. As a result there is a lot of wine on the market priced at levels that would be impossible to achieve if they were responsible for all of the steps of production that you mention (and you didn't even get into trying to buy land with the crazy price of California real estate!) The end result is that there are lots of great values to be had out there!

Durella | Jan. 13, 2012 at 1:13 p.m. (report)

Please remember that in California a winery like JFJ Bronco can sell direct to a retailer, thus saving from 25-35% that would otherwise go to a distrubutor. It is likely that Trader Joe's has committed to sell no other $2-$3 wine in exchange for exclusivity on Charles Shaw/2 Buck Chuck. When you observe the 2BC shipping cartons, you will see that they are serviceable but inexpensive; the bottles are perfectly presentable but are produced in the tens/hundreds of millions - Bronco is surely paying the lowest price. (China competes fiercely for bottle sales in the U.S.) Advertising costs are minimal/nonexistent for a brand which became a phenomenon in the unique TJ's chain and which is still stacked high in those stores. This is emphatically not a loss leader for Bronco, and obviously the wine pleases millions (6 million cases/year). Me, too, and I have no affiliation with the winery.

nmballa | Jan. 12, 2012 at 2:54 p.m. (report)

Whole foods, Trader Joes, or other large chains sweep in and purchase an entire years production at a heavy discount. The chain can then offer up the product at a heavily reduced price compared to if it was sold sporadically my the vineyard to distributers. I believe it was Trader Joes some years back that swept up a particular vineyards wine. They vineyard folded but the wine was rated superb after the fact. And all of a sudden it was valued at $25 per bottle. Trader Joes was selling it for like $4. It sold out in about 2 days and is now residing in collectors cellars.

Bobby Tanzilo | Jan. 12, 2012 at 2:46 p.m. (report)

Thanks hifilofi! I've seen Two Buck for years but never felt any inclination to try it. Not sure why I got the urge today.