Last week, Target announced it was launching a line of $5 wines to be sold in stores across the U.S. This news was gleefully received, particularly among millennial wine drinkers. Called California Roots, Target’s new line is the latest addition to the segment of “super value” wines most famously represented by the Trader Joe’s Charles Shaw line, better known as “Two Buck Chuck.”
While some are thrilled, the super value category poses an important question: How are these wines so cheap? The reality might make you pause before filling up that shopping cart.
The U.S. three-tier wine distribution system means that actual cost of a bottle of wine is multiplied quite a bit by the time a consumer purchases it. Therefore, if Target or Trader Joe’s plans to charge $5 or less without losing money, they need to make sure that the product itself costs a little as possible. While bottles, corks, labels, and packaging all go into this cost, it all starts with the grapes.