Fred Franzia, the bad-boy California vintner who gave us Two-Buck Chuck, is about to release a $3 Australian white called Down Under Chardonnay. Folks in the Australian wine industry are acting like they just got their pockets picked. I am not certain which offends them more, that an American figured out how to buy up a lot of their surplus wine and package it to sell, or that it reinforces the perception that Australian wine is cheap.
Here’s a typical comment: “I realize you can't stop people making dirt-cheap wines,” Yalumba winemaker Louisa Rose told the weekly newspaper the Australian, “but I'd prefer it if they didn't have Australia written on the label.”
And another: “While value is always important for the wine world,” said importer Frank Kysela, “wine sold at these price points makes it difficult financially for producers.”
The elephant in the living room in this scenario is Yellow Tail, the Australian juggernaut with the wallaby on the label. It sells more wine by dollars in the U.S. than any other imported brand—8.4 million cases, about one-fourth of which is Chardonnay.
Other Australian vintners have a love-hate relationship with Yellow Tail. They tacitly ride Yellow Tail’s coattails to their status as big players on the import scene. On the other hand, they hate it that so many U.S. wine drinkers identify Yellow Tail’s soft, sweet style as typically Australian when it isn’t. Most Aussie wines are dry. They also hate that Yellow Tail sells for about $6 a bottle and they see it stacked up on the ends of more supermarket and liquor store aisles than any other wine out there.
In the face of Yellow Tail’s runaway success, Australia is struggling to establish an image for quality wine, which it has in spades, often for just a few dollars more. And yet Yellow Tail has spawned a menagerie of other low-priced wines, most of which feature other Australian animals on the label. And now this, a $3 bottle emblazoned with the words "Down Under."
How did it happen? Reports in Australia cite a surplus of about 5 million gallons of unwanted Chardonnay occupying tanks after the 2008 vintage. Prices on the bulk market for Chardonnay tumbled to about $1.75 (U.S.) per gallon. Let’s see … five times five, carry the two … gee, that’s about 35 cents' worth of juice per bottle of wine. At $3, that ought to be profitable.
No Australian company took advantage of that situation, partly because no Aussie wants to lower the bar on price. But it’s also because most Australian companies are desperately trying to figure out how to sell the backlog of wine they already have. It had to be a foreigner, an audacious vintner with no compunctions about offending the natives.
That would be Franzia, whose Bronco Wine Co. ruffled the Napa wine world's feathers in 2003 when he came out with a $2 California Cabernet Sauvignon, sold exclusively at the Trader Joe’s chain of discount grocery stores, under the Charles F. Shaw label. He had bought the rights to the label in 1995, when the original Shaw went out of business. Franzia just kept the brand name in his pocket until the opportunity presented itself. The wine scored a huge coup, and the sobriquet "Two Buck Chuck" entered the lexicon.
One big difference between Down Under and Yellow Tail is that the established brand is the product of a long-standing family company that buys grapes and crushed them to make wine. Down Under is assembled from surplus bulk wines, which may or may not be there next year or in succeeding years. So even if it succeeds once, can it do it again?
I haven’t tasted Down Under Chardonnay yet, but I’m hoping to get my hands on some soon. I will let you know what I think of it.
Jamie Sherman — Sacramento — June 24, 2009 5:33pm ET
Apj Powers — Dallas, TX — June 25, 2009 12:27pm ET
Apj Powers — Dallas, TX — June 25, 2009 12:30pm ET
Harvey Steiman — San Francisco, CA — June 25, 2009 12:44pm ET
Apj Powers — Dallas, TX — June 29, 2009 1:54pm ET
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