Here's Why Trader Joe's Wine Is So Cheap

It's no secret that Trader Joe's Charles Shaw wine is steadfastly affordable. When boxed wine mogul Fred Franzia changed the way we drink wine by buying the brand name and vineyards from Shaw himself in 1995 for only $27,000, things looked promising. California's wine industry had just made its international debut a few years earlier, earning respect from even the most prestigious sommeliers. The demand for California wines increased abroad, and bottle prices followed. To keep up with exports, producers throughout California planted additional vines — so many that it caused a surplus in grape supply. 

After 9/11, the economy spiraled, and Franzia recognized a pivotal moment for Two Buck Chuck. Risking everything in 2002, he decided to use the surplus grapes to bottle and sell high-quality wines at ridiculously low prices. He bought land below market value in San Joaquin Valley to harvest grapes. For context, an acre in San Joaquin Valley can cost as little as $24,000 compared to $525,000 per acre in prime Napa Valley. To support economies of scale, Franzia decreased the cost of production by substituting oak chips for oak barrels during the aging process, using inexpensive cork and lightweight glass bottles, and bottling large quantities of wine annually — 90 million gallons or more. His forward-thinking approach allows the legacy of Charles Shaw's cheap, delicious wines to continue today.

Fred Franzia's production strategy became a blueprint for the Charles Shaw brand and created three notable, long-lasting results. First, his economic approach leveled the wine playing field by offering consumers more affordable options. People who had avoided wine due to hefty price tags could suddenly explore award-winning shiraz, cabernet sauvignon, or chardonnay for $1.99; buying a dozen bottles of wine by the case without blinking an eye. The barrier to imbibing tasty wine was broken, creating another monumental shift among consumers: Cheap wine no longer meant poor quality. 

Two Buck Chuck had proven that brands could develop and produce smooth, satisfying, and flavorful wines for about the same price as a vending machine soda. This deep change among consumers forced winemakers and grocery stores to rethink their pricing systems. They needed to make room for more low-priced wines, and they needed to review the competition to ensure they were able to stand out on the shelves. All of these positive changes can be attributed to Fred Franzia and his groundbreaking vision for Charles Shaw wines. A toast. (Just remember to bring a corkscrew, or be forced to hack your way into a wine bottle like a pro.)