Market News

The Legend of Two-Buck Chuck

When was the last time a store brand inspired an urban legend?

Trader Joe's, South Pasadena, CA, is the exclusive distributor of Charles Shaw wine. Each bottle is sold at the astonishingly low price of $1.99 in California stores. Elated shoppers have nicknamed the wine Two Buck Chuck. Shoppers outside California have to part with three dollars for a Charles Shaw bottle (giving rise to the less-popular name Three-Buck Chuck).

The wine, manufactured by Bronco Wine, Ceres, CA, is labeled as "Napa" but the grapes actually come from the San Joaquin Valley. (It's bottled in Napa.) Varieties include Cabernet Sauvignon, Chardonnay, Merlot and Sauvignon Blanc.

Its quality level is very high, especially considering it can cost more to get a cup of coffee. This has brought out numerous theories about how anyone can afford to sell such a good wine at such a low cost.

A popular theory is that corkscrews aren't allowed on airlines, so airlines had to unload all their bottled wine in some manner. Another is that Charles Shaw himself got in a heated divorce, and is intentionally low balling his assets so his wife will get less in the settlement. (That urban legend has been around a while, usually associated with sports cars being sold for $100.)

The actual reason is a grape glut. Grapes and grape juice have been in abundance for several years now, and the downturn in the economy has lessened the demand for wine. Many grapes are wilting on the vine, since the cost for picking them wouldn't be recouped.

Bronco took this opportunity to make a huge amount of inexpensively priced wine with this surplus.
A benefit of the Shaw wine is its word of mouth is bringing in many new customers. Granted, they may just be buying Two-Buck Chuck by the case, but once the boom is over, those that have developed a taste for wine could become lifelong wine customers.

Ironically, the name "Two Buck Chuck" has been filed with the BATF not by Bronco, but by Adler Fels, Santa Rosa, CA. Adler Fels has been sourced by Beverages and more, Concord, CA, to make a private label wine under the distinguished Two Buck Chuck name.

7-11 Gets PL Beer & Wine

7-11, one of the biggest beer retailers in the country, is entering the store brand world with its own Santiago imported six-packs.

7-11, Dallas, TX, will be introducing its first store brand beer this June. The beer, an imported brew named Santiago, will be sold in six packs for $5.99, less than competition from Corona.

The beer will be brewed by Cerveceria La Constancia, San Salvador, El Salvador. Santiago will hopefully tap two lucrative markets: imported beer drinkers, and the growing Hispanic demographic.

Following the Santiago launch, a new private label for wine will join 7-11 shelves. Using the name Regions, a Chardonnay and Pinot Grigio will most likely reach stores in August. Both are imported: the Chardonnay from Australia, and the Pinot Grigio from Italy. Pricing will be at $4.99 for a 375 ml bottle.
7-11 has been adding several premium food and drink items to its selection, most recently its premium Dreammm doughnuts.

Naturally Preferred Goes Nationwide

Kroger, Cincinnati, OH, released its Naturally Preferred organic line nationwide on April 28. The 140 SKU line includes baby food, pastas, cereal, snacks, milk and soy items.

"Our Naturally Preferred brand creates value for our customers by offering a wide variety of high-quality natural and organic products that are an affordable alternative to more expensive national brands," said Don McGeorge, executive vice president for Kroger. The launch is one of Kroger's largest in its 120-year history.

A standout among the Naturally Preferred selection is Naturally Preferred Organic Baby Food, which is the first large attempt of an American store brand to enter the baby food market. The history of generic foods have long tainted some consumers' ideas of store brand quality. Baby food is among the last product categories to be without any private label representation.

Many of the items were previously available in Kroger stores and Kroger affiliates for over a year. This is the first time all of the products are being sold in all of the stores, however. The brand now has the "critical mass" to ensure its long-term success among consumers, McGeorge says. "Naturally Preferred is our ultimate loyalty program because customers can buy this premium brand only in our stores," he said.
A sizable marketing campaign will promote the new launch, with the tag line "Health Conscious, Earth Conscious." Newspaper ads, in-store signage, product demonstrations and samplings will be used.
Kroger is the largest supermarket chain in the country, with almost 2500 stores among its retail operations.

Bug Hunt

The latest promotional event for Safeway, Pleasanton, CA, is a summer-long campaign to give away ... ladies and gentlemen ... the Beetles!

20 new VW Beetles will be the grand prizes in Safeway's OPN 1 UP summer soda promotion. The contest is running from May 2 and September 19 in the U.S. and Canada. Customers are automatically entered every time they buy a 6-, 12-, 24-pack or cut case of Safeway Select canned soft drinks (bottled drinks aren't eligible this year).

All of Safeway's retail outlets (Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Pak'n Save, or Genuardi's) are participating, although Randalls and Tom Thumb are on a store by store basis. Every purchase bought using a store loyalty card (Safeway Club, VonsClub, ValuePlus, CarrsPlus/Safeway Club, Randalls Remarkable, Tom Thumb Reward, or Genuardi's Club) is an automatic entry.

Twenty random drawings, one a week from May 19 through September 29, will determine who wins the grand prize Beetles. This year marks a departure from first and second prizes (usually gift certificates and complimentary Safeway Select products). Cutting the smaller prizes would conceivably reduce prize costs without stopping many people from entering.

Safeway has worked extensively on its summer soda contests, making it an annual event. Previous prizes have been PT Cruisers, Jeeps, kayaks, mountain bikes, and one million dollars.

Above: Safeway rings in the summer with a contest to win 20 VW Beetles through purchase of Safeway Select Cola.

Wegmans Wins For Irradiated Beef

Wegmans, Rochester, NY, has been given the "Award of Excellence" by the International Association of Culinary Professionals for its irradiated ground beef. Irradiation is a tough sell for consumers, and Wegmans was the first to offer it in a store brand. The IACP recognized Wegmans with its Corporate Marketing Campaign award.

Wegmans marketed the ground beef with its "Rare Opportunity" campaign. Irradiated beef is safe to be served rare, and Wegmans used that to market the meat to rare beef lovers.

"Outreach started with significant education of Wegmans employees through an extensive training kit and sessions to inculcate store staff with the knowledge to answer questions and endorse the product," the IACP said. "Sales of the product in the first quarter of its introduction exceeded expectations by 200 percent."

Regular headlines are being made by meat recalls. Millions of pounds of meats are being found to possibly carry e coli, salmonella, or other health hazards. All that meat needs to be recalled, but most of it ends up consumed anyway, with sometimes deadly results.

This set up has made irradiated beef a saving grace. Meat shot with electron beam technology can kill e coli, salmonella, campylobacker and other bacteria.

Many supermarket chains have followed Wegmans in offering hamburger meat that has been irradiated. The meat is labeled "Irradiated for food safety," and sometimes comes with a premium price. Shoppers have a choice of regular or irradiated meat.

Electron beam technology developed by SureBeam Corp, San Diego, CA, has skyrocketed from just Wegmans to thousands of stores in just a year. The technology is also capable of irradiating pork, poultry, potatoes, flour, fruit, vegetables and spices.

Some of the chains that now offer irradiated beef include Albertson's, Boise, ID, Shaw's Supermarkets, West Bridgewater, MA, Hy-Vee, West Des Moines, IA, Price Chopper, Schenectady, NY, both Stop & Shop, Quincy, MA, and Giant, Landover, MD, divisions of Ahold USA, and both Piggly Wiggly and Dick's Supermarkets divisions of Fresh Brands, Sheboygan, WI.

The challenge of selling irradiated meat is a main reason why this technique hasn't been more widely used. The word 'irradiation' doesn't sell food. Some are pushing for the FDA to change irradiation's name to 'cold pasteurization.'

Irradiation, according to the Center for Disease Control, does little to the meat aside from killing bacteria. Thiamin is somewhat reduced, but no other vitamins are changed. There might be a slightly different taste.

Asda Raises New Children's Brand

Asda, Wal-Mart's European subsidiary, is bolstering its British private label selection with a new children's line.

The More for Kids line is aimed at four- to eight-year-olds. It's designed to please parents on quality, and children on taste. Launched in February, its 90-product range covers both food and bath products, in distinct yellow packaging.

A good deal of the More for Kids line is complete meals for the microwave. Stretchy Stringy Chicken 'n' Cheesy Stars are star-shaped nuggets infused with mozzarella. Mild and Creamy Chicken Curry plays to the popularity of Indian food among Britons. Fishy Cod Footie Kit offers cod nuggets in the shape of soccer shirts and shorts. An advantage to these meals is that parents can serve children meals they like in short time, or children can prepare them themselves.

More for Kids is specially developed to be healthier than most children's food. The line has reduced fat, salt and sugar, minimum additives, artificial colors only when no natural ones are available, and some added nutrients, such as calcium. Azo dyes, associated with hyperactivity, have been banned.

Happy Huggy Bear Pizza (in the shape of a bear head, with pepperoni eyes) has been fat and salt controlled, and reduced fat cheese is used. Piggy and Moo Moo cupcakes are sugar and fat reduced, and uses only natural colorings in the icing (in the shapes of pig and cow heads).