The wine glut thread (aka how low can they go?)
 

Hi,
Because of overproduction of white wine varieties in Australia and NZ, expect to read a few stories of 'wine glut' special products.

In Oz we've seen this manifested through very cheap 'cleanskin' varieties of NZ sauvignon blanc.

Now 'Two Buck Chuck's' maker is set to do the same thing by sourcing from the chardonnay wine glut in Australia.

Targeting the most successful (in sales, by value) Australian brand in the USA, YellowTail, Bronco Wine Co, makers of Charles 'two buck Chuck' Shaw, is about to release a new product.

• It's going to give Australian chardonnay a bad name.
• It's only three bucks.
• It will be called, oh-so-imaginatively, Down Under.

(By contrast, New Zealand's makers, rather than sell their excess sauv blanc, poured it into the bay rather than get a few bucks before draining their tanks... or so I've been told. If not, expect the same game!)
I predict you will see some cheap 'glut' chardonnay from Oz but no glut SB from NZ.

I still can't believe they can buy it so cheap, bottle, distribute and sell for $3!:rolleyes::eek: [What the ????, chuck? Or as we say downunder in both countries, bugger!]

If the company is purchasing bulk for 60c a liter, there's only 45c worth of wine per bottle. Fixing supply is going to be a multi-year process.

The New Yorker magazine had something about Fred Franzia and Bronco wines a few weeks back. I think he has the 4th largest U.S. wine marketer IIRC.

Part of his strategy is to buy up wine labels (Charles Shaw being one of them) and push out new wines using these labels when he can get a cheap bulk purchase. One of the stories is how he waited and saw prices for bulk wine drop from the mid teens (USD/gallon) down to under $1, which is his price point.

He also has a significant amount of acreage under vines (IIRC, 2nd after the Gallo family, who he is a cousin of) and he goes for high yield to keep costs down. The California Central Valley offers such growing conditions and he keeps away from Napa/Sonoma (has a grudge against the former).

Given the sharp drop in shipping costs, it's not inconceivable he can get the wine tankered to the U.S. and bottled/sold there and still make money (most of the costs is tax/duty in most countries). Not much different than bottled water from Italy and France. In the New Yorker article, he was waiting to generate cash (abhors debt) to buy a bottle-making plant to further reduce this cost.

If Yellow Tail - cheap wine sold primarily to people who like cute critters on their labels - hasn't already ruined Australia's wine rep, surely this won't.

$3.99 a bottle here in Chicago, IIRC it started out ~$7.99

In product (rather than buyer) terms:
Don't equate Yellowtail with two buck chuck; the former is bottled, made and sourced from a single region by a family company, with an emphasis on consistency and quality.
This region has been growing grapes and making wine since the 1960s or earlier.

The latter is just repackaging bulk wine which might be okay, but will be sourced through brokers and can come from anywhere and needs to be transported halfway around the world and then bottled.

There are too many risks there in quality control terms to make these comparable.

If you are implying that Yellowtail is bought at WalMarts as a token purchase with no interest in the quality of the product, then let's see how this plays out. I'd expect the end product would be similar to the wines I've seen sold in Australia for $2 (or given away as freebies).

It's not horrible, but not at all interesting and it will eventually get the drinker drunk... one of the main points of cheap plonk!

Sterling, like they do every Memorial Day, Labor Day and 4th of July weekend was having a warehouse sale this weekend.

You could go up to the winery and buy a bottle of their viognier for $28 or a bottle of their Reserve SVR Bordeaux Blend for $55 a bottle, or if you bought it in the warehouse or whatever it was, the exact same vintage was $79 a case for the viognier (12 bottle full cases only) and $175 or so for the SVR.

That's $6.50 for the white, and like $15 for the SVR a bottle. It was almost how sad to see how they wanted wine out the door and cash in the door. We have many friends who would see either of those as wines way out of their league, so I would expect them to be seeing some as gifts or party wine once the boxes arrive.

My point is that it's not just the assumed low quality producers who are in need of some serious cash flow, there were sales signs everywhere.

I can't really comment on this new wine from Bronco, but it's not surprising given how they operate.

I do agree with l'etoile though, this just looks to out Yellowtail, Yellowtail. Cheap Aussie wines using god knows what kinds of synthetics to "enhance" the flavors.

Just remember, the stuff sells. While we all might scoff at Charles Shaw/Bear's Lair/Black Mountain/etc, it sells by the case. The average consumer is perfectly happy with it and buys again and again.

;)