Connect with us

Market Analysis News

Options trading 4. Trader Joe’s No-Buck Chuck

Options trading 4. Trader Joe’s No-Buck Chuck

Options trading 4. Trader Joe’s No-Buck Chuck

Options trading 4. Trader Joe’s No-Buck Chuck

Options trading 4. Trader Joe’s No-Buck Chuck


Options Market News

Options trading 4. Trader Joe’s No-Buck Chuck

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS:…

Options trading 4. Trader Joe’s No-Buck Chuck

Options trading

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS: Product Misplacement with Mindy Eskow.

Reported and produced by Dan Bobkoff, with Anna Mazarakis and Clare Rawlinson.

Read more:

Options trading Transcript

Note: This transcript may contain errors.

DAN BOBKOFF: Quick note before we start: this episode has one moment of foul language. You might not even notice, but it’s there. So watch out, kiddos.

CHARLES SHAW: [pouring wine] So let’s pour it out. See what we got.

DB: This is a wine expert who really knows his stuff…

CS: So the first thing we’re going to look for is aroma. A fine wine has actual qualities of the grape, and you can smell the fruitiness of the grape, and frankly, I can smell some fruit in this wine. This is amazing.

DB: So we brought him a bottle to get his take.

CS: So I’m going to taste it.

DB: It’s a merlot, but not a kind he would normally buy.

CS: First thing I would do is put it under my tongue, and I picked up some decent acidity. It’s not bad. It’s a little dry. It’s got some tannin. And then I’m just going to put it in my mouth and see what I think. I think this is a very satisfying wine.

DB: Especially for under three dollars. … That wine? It’s Charles Shaw.

From Business Insider and Stitcher, this is Household Name, the show about brands you know, and stories you don’t. I’m Dan Bobkoff.

Since 2002, the grocery chain Trader Joe’s has sold nearly a billion bottles of Charles Shaw wine.

It’s popular in large part because it’s cheap. Just two or three dollars. That’s why it became known as Two Buck Chuck.

But there is a real man named Charles Shaw. He has almost nothing to do with how the bottle with his name on it became so popular.

HIS story is a tale of love and loss. Boom and bust. A pioneer ahead of his time. And then mistakes, unintended consequences and a surprising rebirth.

Stay with us.

ACT I

DB: The first time I heard of Charles Shaw wine was in the early 2000s. I was in college. And it was starting to make news as this great underdog story. This ultra cheap wine I could actually afford was apparently as good as the expensive guys. Even NPR was reporting on it.

NPR CLIP: Some consumers still equate quality with price. That was was not the case in the 28th Annual Eastern Wine Competition. With 2,300 wines in competition, judges awarded a prestigious double gold medal to a $1.99 bottle of California wine, the 2002 Charles Shaw Shiraz.

DB: It would happen again. Its 2005 Chardonnay won top prize at the Cal Expo competition. And then other top awards in Orange County. And so like a lot of young college grads in the 2000s, I started drinking it.

There’ve been a lot of cheap wines over the years, but there was something different about Two Buck Chuck. It became a part of our lives.

KYLE KERCHAERT: In college, Two Buck Chuck was everywhere. I would see the cases of wine replace kegs at parties.

BRYAN YOUNG: I was throwing a party, so we were like, ‘hey, wouldn’t it be great to save money and also have this quirky thing, we’ll just get all this really cheap wine and when people walk in the door, we’ll hand them a bottle of Two Buck Chuck that they just drink straight from the bottle.’

STEPHANIE ASYMKOS: I was newly single, I was living alone for the first time in my life, and I would go to Trader Joe’s, grab frozen dinners, then I’d grab my wine and go home and unwind and I just like to feel that the Two Buck Chuck really elevated the whole experience.

DB: The bottle looks respectable. It even has a cork. The label is downright classy. There’s a little picture of a gazebo on the front and a nice serif font.

After college, my friends and I would serve it at parties and we’d simulate a fancier life than we could actually afford.

But to be honest, at that price, I never thought to question if Charles Shaw is a real person. It’s so generic sounding I just figured someone made it up to make the wine look more legitimate.

But it turns out…

CS: My name is Charles Shaw and I go by Chuck. Almost everyone calls me Chuck. So I always say I’m Chuck Shaw.

DB: This is that wine expert you heard at the top of the show. And as you’ll learn, that is his name and his bottle, but he didn’t make this wine.

[CHUCK HUMMING]

These days, the real Chuck Shaw lives alone in a high rise apartment building in Chicago.

He works overnights on databases at the Chicago Board of Trade.

He’s 74 and he spends his spare time fishing and out on the water. His decor could be described as porch furniture.

CS: I live kind of in a Bohemian thing. I’ve got a – I’ve got a stand up paddleboard is my thing. I’ve got a kayak and you know I’m a sea kayaking guy and I’m a fly fisherman, I’ve got – I’m going fly fishing this week.

DB: But many years ago – long before Two Buck Chuck came into anyone’s consciousness – Chuck Shaw was a winemaker, and he and his wife, Lucy, founded the original Charles Shaw wine label – in the Napa Valley, back in the late ’70s. Few people know the details about this. And it’s a story that Chuck holds close to his heart, even today…

CS: I did feel the whole time I was in Napa Valley that I was really alive. And I haven’t been that way since.

DB: He still has a bunch of nostalgic photos from his winemaking days…

CS: “his is the winery and you can see we had – you know, this is a pretty serious operation and these are 50 acres here...This is all Chardonnay over here. This is Gamay, all this. And this was – this was all Chardonnay, we made that Chardonnay, we made this all sauvignon blanc…

DB: On a shelf, there’s an empty bottle from a 1987 Pinot Noir. There are also framed labels lining his apartment walls: one is a 1988 Gamay Beaujolais Nouveau decorated with fall leaves on the label.

You might be confused if you’ve never heard about the real Chuck Shaw before, but stick with me.

The thing you need to remember about Charles Shaw is that the wine for sale today at Trader Joes — the wine in bottles that look almost identical to the labels on his wall — is not his wine. It’s not his company. But it is trading on his legacy.

DB: So, you’re basically out of the business around ’92 is that right?

CS:Yes, exactly.

DB: And then you have nothing to do with the Charles Shaw brand after that?

CS: Absolutely nothing.

DB: So how did we get here? And who exactly is Charles Shaw?

CS: I was born in Flint, Michigan.

DB: His parents worked at General Motors. After high school, he left for four years at West Point, then the Air Force, where he became an officer, working in what he calls “space matters.” He’d travel around the country negotiating contracts for the Air Force.

He was living in Manhattan Beach in California, where his roommate introduces him to a young woman named Lucy.

They fall in love, quickly married, and had their first child at an air force base. And then came another.

CS: And so I took my family – I had two children at the time – and my wife and we moved to Mountain View, California in the Palo Alto area and lived in the middle of an apricot orchard and went to the Stanford Business School but that’s where I got mixed up in the wine business.

DB: And were you both into wine at this point? is that something you bonded over?

CS: No my my wife Lucy, she never imbibed. She never – she didn’t believe in drinking, didn’t think it was for her and she never has.

DB: And this is long before Californian wine had any reputation right?

CS: It was starting. You know what I mean? It was just starting.

DB: A lot of things were happening in garages near Stanford back then. Some people were starting tech companies. Others were making wine. And they wanted the Stanford students’ help.

So this is where he first gets the wine bug. He graduates from business school in ’71. The family moves to Houston, but he just can’t stop thinking about wine.

Between shifts at his day job at Bank of the Southwest, he’d sneak away here and there to call a distributor in Texas or Louisiana. Then one day, the bank offered him a job in Paris.

CS: I remember the first weekend, I took my mother in law to Bordeaux to see all the – see all the chateaus, I was so excited to see them. We had a little Peugeot and you know took my two children, my wife and we drove down, spent a weekend or a long weekend in Beaujolais and I ended up drinking a lot a Beaujolais for the rest the time I was in Paris.

DB: Beaujolais is good everyday wine. Burgundy is the good stuff for special occasions. At least that’s how Chuck says it works in France.

So basically, Paris brought his wine obsession to new depths…

He’s really taking to French wine culture, and is falling in love with Beaujolais. And he never forgets about those wine pioneers he met at Stanford. But to join them would take some serious capital.

CS: My wife was an heiress to a certain extent. Her family were wealthy rice farmers and she – her grandfather was a very powerful, you know, land owner in southern Texas.

DB: A rice tycoon.

CS: Yeah he was, he was and some of them would have something like 40,000 acres of rice farms.

DB: While they’re in Paris, Lucy inherits something like $300,000. That’s like $1.5 million in today’s money.

Now he has the love of French wine, and they have some cash. They move from Paris to the Napa Valley, and he plots to build a house and plant a vineyard.

But Napa in the ’70s wasn’t like the well-trodden, tourist-friendly wine country it is today. There were more cattle than wineries, almost no hotels. There wasn’t much going on.

DB: Was your wife on board with this plan?

CS: Well I thought so but we moved all the way there and when we got there she – after about a month or two, she said she couldn’t live in Napa Valley, that it was just too much of a shock for her, coming from Paris to go to Napa Valley. And our property was on top of Howell Mountain overlooking Lake Hennessey. You know, geez, like paradise up there. But there were eagles up there, there were rattlesnakes out there. So it was really a shock that she didn’t want to do that.

DB: Lucy was restless and unhappy, isolated in wine country without even the comfort of a good glass of red. So Chuck shelves his plans. But a few years later, his dream of opening a winery is about to come true… he and Lucy find the perfect 35 acres in California.

CS: So we decided to buy it. It was three hundred and some thousand dollars.

DB: That was a lot of money then.

CS: Yeah that was a lot of money but it was planted. In other words it was brand new vineyard. So in terms of planted vineyard, I think we paid like six or seven – seven or eight thousand dollars an acre. Now that Vineyard today is probably about 300 to 500,000 an acre.

DB: Wow.

CS: So you could just see what it was like. Geez.

DB: He had the dream; his wife’s family had the cash. It was an all or nothing gamble.

Lucy’s relatives chipped in $60,000. Lucy put in 25 grand of her own money. The rest he got from loans and cashing in on stock options from a previous job.

All he had to do now was crack open a book on French winemaking a friend had given him, and start growing those Beaujolais grapes he loves.

And he really took to it ! quickly selling early batches to other wineries. Then great reviews roll in, and soon enough, he decides it’s time to put his name on the winery.

Then, Lucy puts in another hundred grand of her money. His dream of bringing French wine culture to America is within sight.

CS: Well, you see, this is where I think that I failed. Ok? This is where I think that the failure and where my problems really fundamentally come from.

DB: Coming up, those problems. There were a lot of them.

ACT II

DB: Ok, we’re back.

Charles Shaw is finally realizing his dream in California. He has a winery. He’s figured out how to make those French wines he enjoyed in Paris. And pretty soon he is selling the stuff!

As the 1980s roll around, Chuck is on his way to some very high highs… and some very low lows.

It was almost….like an opera.

[YES, GIORGIO CLIP]

This is a clip from the movie Yes, Giorgio with Luciano Pavarotti. It’s not exactly the highest point of Pavarotti’s career. It’s not fondly remembered, if it’s remembered at all. But it was a major production by MGM studios…and it was filmed on Chuck’s vineyard.

CS: MGM spent about three weeks there and they built a tennis court in the middle of our Gamay vineyard for the film with that gazebo. And that’s where the packaging came with the gazebo was from the film with Pavarotti.

DB: I had no idea this is why that gazebo was always on the labels of Two Buck Chuck…but this is where it comes from – even though, again, Two Buck Chuck is NOT Chuck Shaw’s wine…don’t worry, we’ll get there.

CS: I ended up liking opera. To this day it has been a great enjoyment to me and prior to that I didn’t even know what one was, you know?

DB: Opera and fine wine go well together. Never mind that Pavarotti was Italian and Chuck was making french wine! These details didn’t matter – Chuck’s plan to bring great everyday French wines to America was starting to work.

His first vintage — 1979 — sold really well. It was Gamay, a kind of Beaujolais. Really good wine, but not too fancy. The kind you might drink on a Wednesday. It might sell for ten or fifteen bucks today.

CS: It is so fruity, when you sit down at the table and the wine glass is poured out, you can smell the aroma just sitting at your table. It’s incredibly beautiful Garnet color, it’s famous for its Garnet colour, which is blue side of red and it’s such a beautiful thing in the glass and it’s so aromatic.

DB: Meanwhile, Lucy still didn’t drink. And this made for some interesting moments in the Napa Valley social scene.

CS: When we had dinner parties, she would put up a sign on the dining room door “no wine talk” and so. (laughs)

DB: How did that go over?

CS: Well you know to her credit, maybe it broadened some of these folks, including myself, because we were so immersed in the business you know what I mean? It was just business, business, business. But perhaps she didn’t you know, she didn’t love it like somebody who was involved in the production and you know in my case making wine and it was such a serious thing, you know. my goodness it was so competitive and you know it’s a competitive business.

DB: That competition demanded a winning strategy, Or… some bets that really paid off. For Chuck, his whole bet here was that he’d make a great everyday wine like the French drank: Gamay — that kind of Beaujolais. And he figured he’d have that corner of the market to himself.

CS: I screwed up I think in strategy because several producers in Napa Valley produced Cabernet Sauvignon. And I considered that competition so if I would do Burgundy wines like Gamay, I wouldn’t have to compete with the guys that were Cabernet, Cabernet, Cabernet and I could niche this thing, plus that’s the popular wine style in Europe. You know so I could be selling to the masses while these guys selling to the fancy trade.

DB: It made sense in theory. But here’s the thing: Americans didn’t know a lot about wine back then. Many thought it was elitist – all of it.

So because there were so many wineries pushing cabernet, Americans were like: oh! That must be what we should drink. Meanwhile, Chuck was just about the only guy selling Gamay. At first, his distributor Wilson Daniels was excited, but then…

CS: It didn’t catch on.

DB: Even though the wine was genuinely GREAT!

CS: We won gold medals in every tasting we were in. And we, I did three White House state dinners with that Gamay. We were put into the Mâcon Fair in France, the Burgundy Fair surreptitiously. So that’s how successful that wine was in terms of amazing quality.

DB: But people weren’t buying it. Chuck had a Gamay glut, and had to find a place to dump it.

CS: I ended up going to Trader Joe, Joe Coulombe down in Pasadena. He’s a Stanford guy. So I go down there, ‘hey Joe you know let’s do a deal.’ And I sold it at a price. He had a truckload sale. You know what I mean?

DB: I know you’re probably thinking this is the beginning of Two Buck Chuck at Trader Joe’s. But it’s not.

It wasn’t sold as Two Buck Chuck then…it is just a coincidence that Chuck Shaw sold his much more valuable wine to Trader Joes, for about $2 a bottle.

See, Napa Valley winemakers back then would often dump their excess product for cheap at Trader Joe’s, but they didn’t want to be associated with bargain wines, so Joe would just sell it quietly — never advertising the labels.

CS: …that way you protect your brand. And so all the Napa wineries if you had inventory problems you would just lay it off to Trader Joe.

DB: Anyway, he learned from that and started diversifying to Chardonnay and Pinot Noir.

And he bounced back — in a big way. He released wines with American Airlines. He had grand openings at fancy hotels. He continued to travel the world with his wine.

DB: And so it sounds like in the mid ’80s things are great.

CS: Yeah.

DB: So what happened?

CS: Well in the mid 80s was what could – what could go wrong? Right. I’ve got five children. It was kind of a – man, it was an intense period of time in the business, meaning people were coming into Napa Valley, they were building hotels and fancy restaurants and you know what I mean? It was just – God it was like a boom you know? And here I was in the midst of it and I was one of, say 18 principal producers. It was just wonderful, so the thing is what could go wrong right?

DB: A lot of things were about to go wrong. This lifestyle and the winery’s growth was all fueled by debt. He used that debt to double production but there wasn’t enough demand. Then, he had an idea to put it in fancy wine barrels, but the supplier coated them in paraffin…

CS: So the wine was polluted by this petroleum flavor.

DB: …and he lost 10,000 cases.

CS: I took one taste of that wine and almost broke my heart.

DB: That wasn’t all. A bug called root louse destroys his main vineyard. This starts to worry his wife and her family who are financing a lot of this. And then to top it off, a bank calls and wants some of its money back.

DB: Did you feel like this was the beginning of the end? I mean what was going through your head?

CS: Well I tell you it makes you uncomfortable to lose that kind of money, you know it’s a stressful – and I think maybe my spouse was saying ‘what a dumb shit. ‘You know what I mean? Because I wasn’t – I don’t think I was attending – enough to her.

And what happened was, I woke up one day on – it was New Year’s Day. And I went out and she turned to me and she was sitting there in bed and said ‘I want a divorce.’

DB: We’ll be right back.

ACT III

DB: Ok, we’re back, and Charles Shaw has just gotten some of the worst news of his life.

CS: It just completely, completely just – I just dropped – I just dropped down you know crying.

DB: And was that totally out of the blue for you? Had you not realized?

CS: Yes. Completely out of the blue. And I was just crushed. And I was desperately in love with my wife, she was a – she’s quite an attractive woman and quite a character.

DB: The Charles Shaw winery might have survived the bad barrels and the sick vines and the overproduction and the banks asking for some money back. It might have survived all that, if Lucy’s family had sunk more money into the whole venture. But they were done.

CS: And so I went to get the capital. And my wife would not allow that because she had decided to divorce me and I wasn’t aware of that. And so when that morning I woke up, she said she wanted a divorce, probably she just lost confidence in me.

DB: If you think that sounds harsh, just remember – without Lucy’s investment, Chuck would never have had any of it. She says in total, she thinks she invested something like $450,000. That’s more than a million in today’s money.

And we asked Lucy about all this. And she said there were other reasons the marriage fell apart.

But with the marriage failing, the business partnership was too.

Someone suggested declaring the whole thing unmanageable so the state would come in and take over the winery.

CS: I was so disappointed about the failing marriage, it just broke my heart.

DB: What happened was Lucy wanted to take control of the winery. If the divorce went through, she and her mother owned enough of it that they could vote to remove Chuck as general partner.

CS: She removed me. It was right in the middle of harvest, 1991 I think it was. She called a meeting and removed me as a general and then in the agreement with Kobrand, they had 30 days to accept a new general partner if Charles Shaw were removed.

DB: But, here’s the twist…

CS: They did not accept Mrs. Shaw as a general partner. And so the distribution of the winery completely collapsed within 30 days of me being removed as a general partner. And so she declared bankruptcy.

DB: They submitted a plan to reorganize, but the court rejected it. A trustee took control.

In its final year, the real Charles Shaw winery had produced 65,000 barrels, and then it was all over.

CS: The winery thing just was a secondary thing to me. I just couldn’t get over the – I was on the vestry of my church for all those years. You know what I mean? And I coached the football – the kids football in town. And I just didn’t feel like much of an example. You know? And I just – it just crushed me. I’m from the Midwest. I’m a religious man. And it just damn near, I just damn near died.

DB: After this huge loss, something else is taken from Chuck – his name.

The trustee for the winery now owned the Charles Shaw brand and label design.

A couple of marketing guys from the famous Robert Mondavi winery realize, ‘hey, that brand is worth something’.

So they scoop it up, and immediately sell it to Fred Franzia, a savvy businessman who mass produces wine at his Bronco Wine Company – remember that name.

After the collapse of the winery, he heads east and eventually ends up in Chicago where he tries to build a new life. He had no idea his name and label had been sold.

But back in California his brand name and that label design with the gazebo are sitting on a shelf at the Bronco Wine Company.

Now, Bronco is not known for fine wine. It produces on a mass scale in huge industrial tanks.

Its grapes are grown in the far less prestigious Central Valley. If they’re aged at all, it’s on the highway to the plant near the Napa airport so it can say it’s from that region.

Some call it a “zip code winery.”

Fred Franzia is savvy – he built Bronco by buying up names and labels from bankrupt wineries.

He bought the Charles Shaw brand name for $27,000 and just held onto it.

That is, until 2002.

It’s after 9/11. There’s a recession, which led to a big wine surplus, and that’s when Fred looks at all the labels he’d bought up over the years, but never used, and pulls one off the shelf.

You guessed it: Charles Shaw.

And in an ironic repeat of history, Fred takes it down to none other than Trader Joe’s to go back back on the shelf, with a $2 label.

And this is the moment that the Two Buck Chuck we know today, is born.

DB: How did you first find out about that?

CS: I think Joe sent me a note. Joe Coulombe.

DB: You know, the founder of Trader Joe’s.

DB: Was this a total surprise when this showed up at Trader Joe’s in 2002?

CS: Yeah, complete surprise.

DB: What was your first reaction?

CS: I was all upset!

DB: All of a sudden other wine folks from Napa start noticing this old prestigious brand is being sold for a couple of bucks.

CS: I just thought it was terrible because my friends in Napa Valley blame me for this low priced, former Napa brand coming in and making them – I think some of them felt it was making them look bad.

DB: This is the kind of elite wine world Charles Shaw belonged to – a pretty far cry from the Bronco world of bargain bottles!

CS: You know and here I was trying to tell my old Napa Valley vintner guys that it wasn’t me that did it.

DB: It’s been 16 years since then…and Two Buck Chuck’s still going strong. And over the years, Chuck Shaw has come to terms with it all…

CS: Well, today my reaction is exactly the opposite. I am just thrilled.

DB: He pulls out the May 2017 Trader Joe’s newsletter celebrating the 15th anniversary of the wine. A billion bottles.

Bronco has been able to keep costs down by running things very differently than the real Chuck Shaw. Bulk production, cheap corks, cheep bottling, cheap shipping, cheap real estate costs. Everything is pretty cheap. And that’s the point. The masses don’t always need fancy French wines as Chuck thought.

CS: So what my point is now is wait a minute. If it weren’t for these guys, we would be nothing. No one would even know who we are and what we did.

I failed. Yeah sure I failed. But I went to talk to Stanford last year, and the kids all come up to me and said ‘Oh God it’s great. You know hell all the dorms love it. You know all of the fraternities and sororities love it’ so can’t be all bad. So I think what the hell you know?

DB: Have you seen a penny from those billion bottles?

CS: No. No. Not a penny.

DB: He’s not the first person in business to lose control of his name. He’s not the first to watch someone else make millions off something he built. But it still stinks, right?

DB: Do you ever think you know if you had had some rights to that name like what what would they have done for your life?

CS: Well make it different, wouldn’t it?

And here is the – a state dinner for the prime minister of the Islamic Republic of Pakistan…

DB: After he had shown us pictures of state dinners, an unopened 1988 Charles Shaw Sauvignon Blanc, and old magazine articles about his winery, we pull out that 2014 Charles Shaw Merlot from Trader Joe’s. Before he tasted it, he had one request.

CS: Do you mind if I sign this?

DB: He signs right on the label next to that gazebo from the Pavarotti film.

CS: Whew!

DB: After his divorce, Charles F. Shaw tried to spoil his kids to curry their favor. He found new jobs and new cities. He even tried to start a winery in Michigan. But in the end, Two Buck Chuck at Trader Joe’s has become his legacy, too.

CS: If somebody hears my name, like I’ll be in a restaurant and they’ll look at my credit card. And typically it will be a joke. ‘Oh you must be Two Buck Chuck.’ You know what I mean? That’s what they always say.

DB: And then what do you say?

CS: I say ‘Well yeah I am the founder of that winery. I have nothing to do with it now. But interestingly enough 40 years ago I did.’

DB: Next time you see some 2 buck chuck on the shelf…spare a thought for the real Chuck Shaw.

That’s not the end of today’s episode though – now we’re going to dive into something we call Product Misplacement.

This is the part of this show where we get to hear from YOU, about how brands have infiltrated YOUR life.

We want to know where a major brand was during a specific moment of your life.

The reason I started this show is because I think it’s pretty hard to avoid contact with brands in most of what we do.

They’re attached to so much of our lives,  they become the intertwined with significant moments and memories… maybe you cringe every time you see a Windex bottle? Or Target’s parking lot sends you back to a certain argument…or if you’re like me…you get a lump in your throat when you see an Olive Garden.

Our first Product Misplacement story comes to us from Mindy Eskow, in San Francisco.

MINDY ESKOW: I had a very exhilarating love life in middle school. AOL Messenger was kind of THE place to be, where you can message your crush with a conversation of: ‘Hey!’ ‘Hey!’ ‘What’s up?’ “Nothing much, you?’ ‘Nothing much.’

My actual middle school crush only Yahoo Messenger. I got a Yahoo email address just so we could instance message. Our conversations were so much more than the classic ‘Hey!’ ‘Hey!’ ‘What’s up?’ conversations I was so used to having at age 12 and I thought that meant we were definitely going to date.

He mentioned that his favorite breakfast item was a type of Quaker oatmeal called Dinosaur Eggs. I wasn’t really a breakfast person but I immediately feigned interest anyways. Dinosaur Eggs oatmeal is a microwavable oatmeal that comes with these little eggs of sugar that hatch into dinosaurs when you microwave it. So like any independent middle schooler, I made it my thing to love Dinosaur Eggs oatmeal so it would later become our thing.

My mom wasn’t super keen on sugary breakfasts, but I think the word “oatmeal” kind of tricked her into buying it for me. It later became a ritual to go to school, be too shy to talk to Trent in person, and then go home and message him about the Dinosaur Eggs oatmeal we ate that day. He even gave me a box of it wrapped with a bow for my birthday one year, which remains one of the most romantic gifts I have ever received.

And then one day, Trent started dating one of my best friends, and my romantic interest in him disintegrated faster than a dinosaur egg in oatmeal. If the year I mostly ate Dinosaur Eggs oatmeal taught me anything, it was about how quickly things in life change, whether it be an egg changing into a dinosaur, or how quickly I could change from loving Dinosaur Eggs oatmeal to never wanting to eat it again.

DB: Love and loss. Thanks Mindy!

Tell us your product placement story! You can record it straight into your phone and then email householdname@businessinsider.com, OR just call 731-3-BRANDS and leave us a message with your name and contact info. That’s 731-3-BRANDS.

CREDITS

DB: To hear Household Name without ads AND to get access to the first SIX episodes…sign up for Stitcher Premium at stitcherpremium.com/householdname and use promo code: HOUSEHOLD for your first month free. And we want to be a household name in the podcast world, so rate and review us to help us get into every home in America, it really helps. 

This episode was produced and reported by me, Dan Bobkoff, who wants you to know that he is not too pleased with new Charles Shaw labels that no longer feature a gazebo. Anna Mazarakis also produced this episode, she loves herself some two buck Pinot Grigio—no judgement there. Our senior producer is Clare Rawlinson, who grew up in Australia, where something called “Passion Pop” played the role of Two Buck Chuck. She was a passionate, Passion Popper.

Mixing, sound design and original theme music by Casey Holford and John DeLore—I wager they’re more craft beer kinda guys. Our editor is Peter Clowney, and he remains very confused by the pricing of Two Buck Chuck. 

Our executive producers at Stitcher are Chris Bannon, Laura Mayer and Jenny Radelet. Special thanks to Natalie O’Neill, Arabella Breck, Stephanie Asymkos, and Kyle Kirkhart. 

Household Name is a production of Insider Audio.

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

You must be logged in to post a comment Login

Leave a Reply


Uncategorized

Options trading 4. Trader Joe’s No-Buck Chuck

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS:…

Options trading

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS: Product Misplacement with Mindy Eskow.

Reported and produced by Dan Bobkoff, with Anna Mazarakis and Clare Rawlinson.

Read more:

Options trading Transcript

Note: This transcript may contain errors.

DAN BOBKOFF: Quick note before we start: this episode has one moment of foul language. You might not even notice, but it’s there. So watch out, kiddos.

CHARLES SHAW: [pouring wine] So let’s pour it out. See what we got.

DB: This is a wine expert who really knows his stuff…

CS: So the first thing we’re going to look for is aroma. A fine wine has actual qualities of the grape, and you can smell the fruitiness of the grape, and frankly, I can smell some fruit in this wine. This is amazing.

DB: So we brought him a bottle to get his take.

CS: So I’m going to taste it.

DB: It’s a merlot, but not a kind he would normally buy.

CS: First thing I would do is put it under my tongue, and I picked up some decent acidity. It’s not bad. It’s a little dry. It’s got some tannin. And then I’m just going to put it in my mouth and see what I think. I think this is a very satisfying wine.

DB: Especially for under three dollars. … That wine? It’s Charles Shaw.

From Business Insider and Stitcher, this is Household Name, the show about brands you know, and stories you don’t. I’m Dan Bobkoff.

Since 2002, the grocery chain Trader Joe’s has sold nearly a billion bottles of Charles Shaw wine.

It’s popular in large part because it’s cheap. Just two or three dollars. That’s why it became known as Two Buck Chuck.

But there is a real man named Charles Shaw. He has almost nothing to do with how the bottle with his name on it became so popular.

HIS story is a tale of love and loss. Boom and bust. A pioneer ahead of his time. And then mistakes, unintended consequences and a surprising rebirth.

Stay with us.

ACT I

DB: The first time I heard of Charles Shaw wine was in the early 2000s. I was in college. And it was starting to make news as this great underdog story. This ultra cheap wine I could actually afford was apparently as good as the expensive guys. Even NPR was reporting on it.

NPR CLIP: Some consumers still equate quality with price. That was was not the case in the 28th Annual Eastern Wine Competition. With 2,300 wines in competition, judges awarded a prestigious double gold medal to a $1.99 bottle of California wine, the 2002 Charles Shaw Shiraz.

DB: It would happen again. Its 2005 Chardonnay won top prize at the Cal Expo competition. And then other top awards in Orange County. And so like a lot of young college grads in the 2000s, I started drinking it.

There’ve been a lot of cheap wines over the years, but there was something different about Two Buck Chuck. It became a part of our lives.

KYLE KERCHAERT: In college, Two Buck Chuck was everywhere. I would see the cases of wine replace kegs at parties.

BRYAN YOUNG: I was throwing a party, so we were like, ‘hey, wouldn’t it be great to save money and also have this quirky thing, we’ll just get all this really cheap wine and when people walk in the door, we’ll hand them a bottle of Two Buck Chuck that they just drink straight from the bottle.’

STEPHANIE ASYMKOS: I was newly single, I was living alone for the first time in my life, and I would go to Trader Joe’s, grab frozen dinners, then I’d grab my wine and go home and unwind and I just like to feel that the Two Buck Chuck really elevated the whole experience.

DB: The bottle looks respectable. It even has a cork. The label is downright classy. There’s a little picture of a gazebo on the front and a nice serif font.

After college, my friends and I would serve it at parties and we’d simulate a fancier life than we could actually afford.

But to be honest, at that price, I never thought to question if Charles Shaw is a real person. It’s so generic sounding I just figured someone made it up to make the wine look more legitimate.

But it turns out…

CS: My name is Charles Shaw and I go by Chuck. Almost everyone calls me Chuck. So I always say I’m Chuck Shaw.

DB: This is that wine expert you heard at the top of the show. And as you’ll learn, that is his name and his bottle, but he didn’t make this wine.

[CHUCK HUMMING]

These days, the real Chuck Shaw lives alone in a high rise apartment building in Chicago.

He works overnights on databases at the Chicago Board of Trade.

He’s 74 and he spends his spare time fishing and out on the water. His decor could be described as porch furniture.

CS: I live kind of in a Bohemian thing. I’ve got a – I’ve got a stand up paddleboard is my thing. I’ve got a kayak and you know I’m a sea kayaking guy and I’m a fly fisherman, I’ve got – I’m going fly fishing this week.

DB: But many years ago – long before Two Buck Chuck came into anyone’s consciousness – Chuck Shaw was a winemaker, and he and his wife, Lucy, founded the original Charles Shaw wine label – in the Napa Valley, back in the late ’70s. Few people know the details about this. And it’s a story that Chuck holds close to his heart, even today…

CS: I did feel the whole time I was in Napa Valley that I was really alive. And I haven’t been that way since.

DB: He still has a bunch of nostalgic photos from his winemaking days…

CS: “his is the winery and you can see we had – you know, this is a pretty serious operation and these are 50 acres here...This is all Chardonnay over here. This is Gamay, all this. And this was – this was all Chardonnay, we made that Chardonnay, we made this all sauvignon blanc…

DB: On a shelf, there’s an empty bottle from a 1987 Pinot Noir. There are also framed labels lining his apartment walls: one is a 1988 Gamay Beaujolais Nouveau decorated with fall leaves on the label.

You might be confused if you’ve never heard about the real Chuck Shaw before, but stick with me.

The thing you need to remember about Charles Shaw is that the wine for sale today at Trader Joes — the wine in bottles that look almost identical to the labels on his wall — is not his wine. It’s not his company. But it is trading on his legacy.

DB: So, you’re basically out of the business around ’92 is that right?

CS:Yes, exactly.

DB: And then you have nothing to do with the Charles Shaw brand after that?

CS: Absolutely nothing.

DB: So how did we get here? And who exactly is Charles Shaw?

CS: I was born in Flint, Michigan.

DB: His parents worked at General Motors. After high school, he left for four years at West Point, then the Air Force, where he became an officer, working in what he calls “space matters.” He’d travel around the country negotiating contracts for the Air Force.

He was living in Manhattan Beach in California, where his roommate introduces him to a young woman named Lucy.

They fall in love, quickly married, and had their first child at an air force base. And then came another.

CS: And so I took my family – I had two children at the time – and my wife and we moved to Mountain View, California in the Palo Alto area and lived in the middle of an apricot orchard and went to the Stanford Business School but that’s where I got mixed up in the wine business.

DB: And were you both into wine at this point? is that something you bonded over?

CS: No my my wife Lucy, she never imbibed. She never – she didn’t believe in drinking, didn’t think it was for her and she never has.

DB: And this is long before Californian wine had any reputation right?

CS: It was starting. You know what I mean? It was just starting.

DB: A lot of things were happening in garages near Stanford back then. Some people were starting tech companies. Others were making wine. And they wanted the Stanford students’ help.

So this is where he first gets the wine bug. He graduates from business school in ’71. The family moves to Houston, but he just can’t stop thinking about wine.

Between shifts at his day job at Bank of the Southwest, he’d sneak away here and there to call a distributor in Texas or Louisiana. Then one day, the bank offered him a job in Paris.

CS: I remember the first weekend, I took my mother in law to Bordeaux to see all the – see all the chateaus, I was so excited to see them. We had a little Peugeot and you know took my two children, my wife and we drove down, spent a weekend or a long weekend in Beaujolais and I ended up drinking a lot a Beaujolais for the rest the time I was in Paris.

DB: Beaujolais is good everyday wine. Burgundy is the good stuff for special occasions. At least that’s how Chuck says it works in France.

So basically, Paris brought his wine obsession to new depths…

He’s really taking to French wine culture, and is falling in love with Beaujolais. And he never forgets about those wine pioneers he met at Stanford. But to join them would take some serious capital.

CS: My wife was an heiress to a certain extent. Her family were wealthy rice farmers and she – her grandfather was a very powerful, you know, land owner in southern Texas.

DB: A rice tycoon.

CS: Yeah he was, he was and some of them would have something like 40,000 acres of rice farms.

DB: While they’re in Paris, Lucy inherits something like $300,000. That’s like $1.5 million in today’s money.

Now he has the love of French wine, and they have some cash. They move from Paris to the Napa Valley, and he plots to build a house and plant a vineyard.

But Napa in the ’70s wasn’t like the well-trodden, tourist-friendly wine country it is today. There were more cattle than wineries, almost no hotels. There wasn’t much going on.

DB: Was your wife on board with this plan?

CS: Well I thought so but we moved all the way there and when we got there she – after about a month or two, she said she couldn’t live in Napa Valley, that it was just too much of a shock for her, coming from Paris to go to Napa Valley. And our property was on top of Howell Mountain overlooking Lake Hennessey. You know, geez, like paradise up there. But there were eagles up there, there were rattlesnakes out there. So it was really a shock that she didn’t want to do that.

DB: Lucy was restless and unhappy, isolated in wine country without even the comfort of a good glass of red. So Chuck shelves his plans. But a few years later, his dream of opening a winery is about to come true… he and Lucy find the perfect 35 acres in California.

CS: So we decided to buy it. It was three hundred and some thousand dollars.

DB: That was a lot of money then.

CS: Yeah that was a lot of money but it was planted. In other words it was brand new vineyard. So in terms of planted vineyard, I think we paid like six or seven – seven or eight thousand dollars an acre. Now that Vineyard today is probably about 300 to 500,000 an acre.

DB: Wow.

CS: So you could just see what it was like. Geez.

DB: He had the dream; his wife’s family had the cash. It was an all or nothing gamble.

Lucy’s relatives chipped in $60,000. Lucy put in 25 grand of her own money. The rest he got from loans and cashing in on stock options from a previous job.

All he had to do now was crack open a book on French winemaking a friend had given him, and start growing those Beaujolais grapes he loves.

And he really took to it ! quickly selling early batches to other wineries. Then great reviews roll in, and soon enough, he decides it’s time to put his name on the winery.

Then, Lucy puts in another hundred grand of her money. His dream of bringing French wine culture to America is within sight.

CS: Well, you see, this is where I think that I failed. Ok? This is where I think that the failure and where my problems really fundamentally come from.

DB: Coming up, those problems. There were a lot of them.

ACT II

DB: Ok, we’re back.

Charles Shaw is finally realizing his dream in California. He has a winery. He’s figured out how to make those French wines he enjoyed in Paris. And pretty soon he is selling the stuff!

As the 1980s roll around, Chuck is on his way to some very high highs… and some very low lows.

It was almost….like an opera.

[YES, GIORGIO CLIP]

This is a clip from the movie Yes, Giorgio with Luciano Pavarotti. It’s not exactly the highest point of Pavarotti’s career. It’s not fondly remembered, if it’s remembered at all. But it was a major production by MGM studios…and it was filmed on Chuck’s vineyard.

CS: MGM spent about three weeks there and they built a tennis court in the middle of our Gamay vineyard for the film with that gazebo. And that’s where the packaging came with the gazebo was from the film with Pavarotti.

DB: I had no idea this is why that gazebo was always on the labels of Two Buck Chuck…but this is where it comes from – even though, again, Two Buck Chuck is NOT Chuck Shaw’s wine…don’t worry, we’ll get there.

CS: I ended up liking opera. To this day it has been a great enjoyment to me and prior to that I didn’t even know what one was, you know?

DB: Opera and fine wine go well together. Never mind that Pavarotti was Italian and Chuck was making french wine! These details didn’t matter – Chuck’s plan to bring great everyday French wines to America was starting to work.

His first vintage — 1979 — sold really well. It was Gamay, a kind of Beaujolais. Really good wine, but not too fancy. The kind you might drink on a Wednesday. It might sell for ten or fifteen bucks today.

CS: It is so fruity, when you sit down at the table and the wine glass is poured out, you can smell the aroma just sitting at your table. It’s incredibly beautiful Garnet color, it’s famous for its Garnet colour, which is blue side of red and it’s such a beautiful thing in the glass and it’s so aromatic.

DB: Meanwhile, Lucy still didn’t drink. And this made for some interesting moments in the Napa Valley social scene.

CS: When we had dinner parties, she would put up a sign on the dining room door “no wine talk” and so. (laughs)

DB: How did that go over?

CS: Well you know to her credit, maybe it broadened some of these folks, including myself, because we were so immersed in the business you know what I mean? It was just business, business, business. But perhaps she didn’t you know, she didn’t love it like somebody who was involved in the production and you know in my case making wine and it was such a serious thing, you know. my goodness it was so competitive and you know it’s a competitive business.

DB: That competition demanded a winning strategy, Or… some bets that really paid off. For Chuck, his whole bet here was that he’d make a great everyday wine like the French drank: Gamay — that kind of Beaujolais. And he figured he’d have that corner of the market to himself.

CS: I screwed up I think in strategy because several producers in Napa Valley produced Cabernet Sauvignon. And I considered that competition so if I would do Burgundy wines like Gamay, I wouldn’t have to compete with the guys that were Cabernet, Cabernet, Cabernet and I could niche this thing, plus that’s the popular wine style in Europe. You know so I could be selling to the masses while these guys selling to the fancy trade.

DB: It made sense in theory. But here’s the thing: Americans didn’t know a lot about wine back then. Many thought it was elitist – all of it.

So because there were so many wineries pushing cabernet, Americans were like: oh! That must be what we should drink. Meanwhile, Chuck was just about the only guy selling Gamay. At first, his distributor Wilson Daniels was excited, but then…

CS: It didn’t catch on.

DB: Even though the wine was genuinely GREAT!

CS: We won gold medals in every tasting we were in. And we, I did three White House state dinners with that Gamay. We were put into the Mâcon Fair in France, the Burgundy Fair surreptitiously. So that’s how successful that wine was in terms of amazing quality.

DB: But people weren’t buying it. Chuck had a Gamay glut, and had to find a place to dump it.

CS: I ended up going to Trader Joe, Joe Coulombe down in Pasadena. He’s a Stanford guy. So I go down there, ‘hey Joe you know let’s do a deal.’ And I sold it at a price. He had a truckload sale. You know what I mean?

DB: I know you’re probably thinking this is the beginning of Two Buck Chuck at Trader Joe’s. But it’s not.

It wasn’t sold as Two Buck Chuck then…it is just a coincidence that Chuck Shaw sold his much more valuable wine to Trader Joes, for about $2 a bottle.

See, Napa Valley winemakers back then would often dump their excess product for cheap at Trader Joe’s, but they didn’t want to be associated with bargain wines, so Joe would just sell it quietly — never advertising the labels.

CS: …that way you protect your brand. And so all the Napa wineries if you had inventory problems you would just lay it off to Trader Joe.

DB: Anyway, he learned from that and started diversifying to Chardonnay and Pinot Noir.

And he bounced back — in a big way. He released wines with American Airlines. He had grand openings at fancy hotels. He continued to travel the world with his wine.

DB: And so it sounds like in the mid ’80s things are great.

CS: Yeah.

DB: So what happened?

CS: Well in the mid 80s was what could – what could go wrong? Right. I’ve got five children. It was kind of a – man, it was an intense period of time in the business, meaning people were coming into Napa Valley, they were building hotels and fancy restaurants and you know what I mean? It was just – God it was like a boom you know? And here I was in the midst of it and I was one of, say 18 principal producers. It was just wonderful, so the thing is what could go wrong right?

DB: A lot of things were about to go wrong. This lifestyle and the winery’s growth was all fueled by debt. He used that debt to double production but there wasn’t enough demand. Then, he had an idea to put it in fancy wine barrels, but the supplier coated them in paraffin…

CS: So the wine was polluted by this petroleum flavor.

DB: …and he lost 10,000 cases.

CS: I took one taste of that wine and almost broke my heart.

DB: That wasn’t all. A bug called root louse destroys his main vineyard. This starts to worry his wife and her family who are financing a lot of this. And then to top it off, a bank calls and wants some of its money back.

DB: Did you feel like this was the beginning of the end? I mean what was going through your head?

CS: Well I tell you it makes you uncomfortable to lose that kind of money, you know it’s a stressful – and I think maybe my spouse was saying ‘what a dumb shit. ‘You know what I mean? Because I wasn’t – I don’t think I was attending – enough to her.

And what happened was, I woke up one day on – it was New Year’s Day. And I went out and she turned to me and she was sitting there in bed and said ‘I want a divorce.’

DB: We’ll be right back.

ACT III

DB: Ok, we’re back, and Charles Shaw has just gotten some of the worst news of his life.

CS: It just completely, completely just – I just dropped – I just dropped down you know crying.

DB: And was that totally out of the blue for you? Had you not realized?

CS: Yes. Completely out of the blue. And I was just crushed. And I was desperately in love with my wife, she was a – she’s quite an attractive woman and quite a character.

DB: The Charles Shaw winery might have survived the bad barrels and the sick vines and the overproduction and the banks asking for some money back. It might have survived all that, if Lucy’s family had sunk more money into the whole venture. But they were done.

CS: And so I went to get the capital. And my wife would not allow that because she had decided to divorce me and I wasn’t aware of that. And so when that morning I woke up, she said she wanted a divorce, probably she just lost confidence in me.

DB: If you think that sounds harsh, just remember – without Lucy’s investment, Chuck would never have had any of it. She says in total, she thinks she invested something like $450,000. That’s more than a million in today’s money.

And we asked Lucy about all this. And she said there were other reasons the marriage fell apart.

But with the marriage failing, the business partnership was too.

Someone suggested declaring the whole thing unmanageable so the state would come in and take over the winery.

CS: I was so disappointed about the failing marriage, it just broke my heart.

DB: What happened was Lucy wanted to take control of the winery. If the divorce went through, she and her mother owned enough of it that they could vote to remove Chuck as general partner.

CS: She removed me. It was right in the middle of harvest, 1991 I think it was. She called a meeting and removed me as a general and then in the agreement with Kobrand, they had 30 days to accept a new general partner if Charles Shaw were removed.

DB: But, here’s the twist…

CS: They did not accept Mrs. Shaw as a general partner. And so the distribution of the winery completely collapsed within 30 days of me being removed as a general partner. And so she declared bankruptcy.

DB: They submitted a plan to reorganize, but the court rejected it. A trustee took control.

In its final year, the real Charles Shaw winery had produced 65,000 barrels, and then it was all over.

CS: The winery thing just was a secondary thing to me. I just couldn’t get over the – I was on the vestry of my church for all those years. You know what I mean? And I coached the football – the kids football in town. And I just didn’t feel like much of an example. You know? And I just – it just crushed me. I’m from the Midwest. I’m a religious man. And it just damn near, I just damn near died.

DB: After this huge loss, something else is taken from Chuck – his name.

The trustee for the winery now owned the Charles Shaw brand and label design.

A couple of marketing guys from the famous Robert Mondavi winery realize, ‘hey, that brand is worth something’.

So they scoop it up, and immediately sell it to Fred Franzia, a savvy businessman who mass produces wine at his Bronco Wine Company – remember that name.

After the collapse of the winery, he heads east and eventually ends up in Chicago where he tries to build a new life. He had no idea his name and label had been sold.

But back in California his brand name and that label design with the gazebo are sitting on a shelf at the Bronco Wine Company.

Now, Bronco is not known for fine wine. It produces on a mass scale in huge industrial tanks.

Its grapes are grown in the far less prestigious Central Valley. If they’re aged at all, it’s on the highway to the plant near the Napa airport so it can say it’s from that region.

Some call it a “zip code winery.”

Fred Franzia is savvy – he built Bronco by buying up names and labels from bankrupt wineries.

He bought the Charles Shaw brand name for $27,000 and just held onto it.

That is, until 2002.

It’s after 9/11. There’s a recession, which led to a big wine surplus, and that’s when Fred looks at all the labels he’d bought up over the years, but never used, and pulls one off the shelf.

You guessed it: Charles Shaw.

And in an ironic repeat of history, Fred takes it down to none other than Trader Joe’s to go back back on the shelf, with a $2 label.

And this is the moment that the Two Buck Chuck we know today, is born.

DB: How did you first find out about that?

CS: I think Joe sent me a note. Joe Coulombe.

DB: You know, the founder of Trader Joe’s.

DB: Was this a total surprise when this showed up at Trader Joe’s in 2002?

CS: Yeah, complete surprise.

DB: What was your first reaction?

CS: I was all upset!

DB: All of a sudden other wine folks from Napa start noticing this old prestigious brand is being sold for a couple of bucks.

CS: I just thought it was terrible because my friends in Napa Valley blame me for this low priced, former Napa brand coming in and making them – I think some of them felt it was making them look bad.

DB: This is the kind of elite wine world Charles Shaw belonged to – a pretty far cry from the Bronco world of bargain bottles!

CS: You know and here I was trying to tell my old Napa Valley vintner guys that it wasn’t me that did it.

DB: It’s been 16 years since then…and Two Buck Chuck’s still going strong. And over the years, Chuck Shaw has come to terms with it all…

CS: Well, today my reaction is exactly the opposite. I am just thrilled.

DB: He pulls out the May 2017 Trader Joe’s newsletter celebrating the 15th anniversary of the wine. A billion bottles.

Bronco has been able to keep costs down by running things very differently than the real Chuck Shaw. Bulk production, cheap corks, cheep bottling, cheap shipping, cheap real estate costs. Everything is pretty cheap. And that’s the point. The masses don’t always need fancy French wines as Chuck thought.

CS: So what my point is now is wait a minute. If it weren’t for these guys, we would be nothing. No one would even know who we are and what we did.

I failed. Yeah sure I failed. But I went to talk to Stanford last year, and the kids all come up to me and said ‘Oh God it’s great. You know hell all the dorms love it. You know all of the fraternities and sororities love it’ so can’t be all bad. So I think what the hell you know?

DB: Have you seen a penny from those billion bottles?

CS: No. No. Not a penny.

DB: He’s not the first person in business to lose control of his name. He’s not the first to watch someone else make millions off something he built. But it still stinks, right?

DB: Do you ever think you know if you had had some rights to that name like what what would they have done for your life?

CS: Well make it different, wouldn’t it?

And here is the – a state dinner for the prime minister of the Islamic Republic of Pakistan…

DB: After he had shown us pictures of state dinners, an unopened 1988 Charles Shaw Sauvignon Blanc, and old magazine articles about his winery, we pull out that 2014 Charles Shaw Merlot from Trader Joe’s. Before he tasted it, he had one request.

CS: Do you mind if I sign this?

DB: He signs right on the label next to that gazebo from the Pavarotti film.

CS: Whew!

DB: After his divorce, Charles F. Shaw tried to spoil his kids to curry their favor. He found new jobs and new cities. He even tried to start a winery in Michigan. But in the end, Two Buck Chuck at Trader Joe’s has become his legacy, too.

CS: If somebody hears my name, like I’ll be in a restaurant and they’ll look at my credit card. And typically it will be a joke. ‘Oh you must be Two Buck Chuck.’ You know what I mean? That’s what they always say.

DB: And then what do you say?

CS: I say ‘Well yeah I am the founder of that winery. I have nothing to do with it now. But interestingly enough 40 years ago I did.’

DB: Next time you see some 2 buck chuck on the shelf…spare a thought for the real Chuck Shaw.

That’s not the end of today’s episode though – now we’re going to dive into something we call Product Misplacement.

This is the part of this show where we get to hear from YOU, about how brands have infiltrated YOUR life.

We want to know where a major brand was during a specific moment of your life.

The reason I started this show is because I think it’s pretty hard to avoid contact with brands in most of what we do.

They’re attached to so much of our lives,  they become the intertwined with significant moments and memories… maybe you cringe every time you see a Windex bottle? Or Target’s parking lot sends you back to a certain argument…or if you’re like me…you get a lump in your throat when you see an Olive Garden.

Our first Product Misplacement story comes to us from Mindy Eskow, in San Francisco.

MINDY ESKOW: I had a very exhilarating love life in middle school. AOL Messenger was kind of THE place to be, where you can message your crush with a conversation of: ‘Hey!’ ‘Hey!’ ‘What’s up?’ “Nothing much, you?’ ‘Nothing much.’

My actual middle school crush only Yahoo Messenger. I got a Yahoo email address just so we could instance message. Our conversations were so much more than the classic ‘Hey!’ ‘Hey!’ ‘What’s up?’ conversations I was so used to having at age 12 and I thought that meant we were definitely going to date.

He mentioned that his favorite breakfast item was a type of Quaker oatmeal called Dinosaur Eggs. I wasn’t really a breakfast person but I immediately feigned interest anyways. Dinosaur Eggs oatmeal is a microwavable oatmeal that comes with these little eggs of sugar that hatch into dinosaurs when you microwave it. So like any independent middle schooler, I made it my thing to love Dinosaur Eggs oatmeal so it would later become our thing.

My mom wasn’t super keen on sugary breakfasts, but I think the word “oatmeal” kind of tricked her into buying it for me. It later became a ritual to go to school, be too shy to talk to Trent in person, and then go home and message him about the Dinosaur Eggs oatmeal we ate that day. He even gave me a box of it wrapped with a bow for my birthday one year, which remains one of the most romantic gifts I have ever received.

And then one day, Trent started dating one of my best friends, and my romantic interest in him disintegrated faster than a dinosaur egg in oatmeal. If the year I mostly ate Dinosaur Eggs oatmeal taught me anything, it was about how quickly things in life change, whether it be an egg changing into a dinosaur, or how quickly I could change from loving Dinosaur Eggs oatmeal to never wanting to eat it again.

DB: Love and loss. Thanks Mindy!

Tell us your product placement story! You can record it straight into your phone and then email householdname@businessinsider.com, OR just call 731-3-BRANDS and leave us a message with your name and contact info. That’s 731-3-BRANDS.

CREDITS

DB: To hear Household Name without ads AND to get access to the first SIX episodes…sign up for Stitcher Premium at stitcherpremium.com/householdname and use promo code: HOUSEHOLD for your first month free. And we want to be a household name in the podcast world, so rate and review us to help us get into every home in America, it really helps. 

This episode was produced and reported by me, Dan Bobkoff, who wants you to know that he is not too pleased with new Charles Shaw labels that no longer feature a gazebo. Anna Mazarakis also produced this episode, she loves herself some two buck Pinot Grigio—no judgement there. Our senior producer is Clare Rawlinson, who grew up in Australia, where something called “Passion Pop” played the role of Two Buck Chuck. She was a passionate, Passion Popper.

Mixing, sound design and original theme music by Casey Holford and John DeLore—I wager they’re more craft beer kinda guys. Our editor is Peter Clowney, and he remains very confused by the pricing of Two Buck Chuck. 

Our executive producers at Stitcher are Chris Bannon, Laura Mayer and Jenny Radelet. Special thanks to Natalie O’Neill, Arabella Breck, Stephanie Asymkos, and Kyle Kirkhart. 

Household Name is a production of Insider Audio.

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

You must be logged in to post a comment Login

Leave a Reply


Uncategorized

Options trading 4. Trader Joe’s No-Buck Chuck

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS:…

Options trading

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS: Product Misplacement with Mindy Eskow.

Reported and produced by Dan Bobkoff, with Anna Mazarakis and Clare Rawlinson.

Read more:

Options trading Transcript

Note: This transcript may contain errors.

DAN BOBKOFF: Quick note before we start: this episode has one moment of foul language. You might not even notice, but it’s there. So watch out, kiddos.

CHARLES SHAW: [pouring wine] So let’s pour it out. See what we got.

DB: This is a wine expert who really knows his stuff…

CS: So the first thing we’re going to look for is aroma. A fine wine has actual qualities of the grape, and you can smell the fruitiness of the grape, and frankly, I can smell some fruit in this wine. This is amazing.

DB: So we brought him a bottle to get his take.

CS: So I’m going to taste it.

DB: It’s a merlot, but not a kind he would normally buy.

CS: First thing I would do is put it under my tongue, and I picked up some decent acidity. It’s not bad. It’s a little dry. It’s got some tannin. And then I’m just going to put it in my mouth and see what I think. I think this is a very satisfying wine.

DB: Especially for under three dollars. … That wine? It’s Charles Shaw.

From Business Insider and Stitcher, this is Household Name, the show about brands you know, and stories you don’t. I’m Dan Bobkoff.

Since 2002, the grocery chain Trader Joe’s has sold nearly a billion bottles of Charles Shaw wine.

It’s popular in large part because it’s cheap. Just two or three dollars. That’s why it became known as Two Buck Chuck.

But there is a real man named Charles Shaw. He has almost nothing to do with how the bottle with his name on it became so popular.

HIS story is a tale of love and loss. Boom and bust. A pioneer ahead of his time. And then mistakes, unintended consequences and a surprising rebirth.

Stay with us.

ACT I

DB: The first time I heard of Charles Shaw wine was in the early 2000s. I was in college. And it was starting to make news as this great underdog story. This ultra cheap wine I could actually afford was apparently as good as the expensive guys. Even NPR was reporting on it.

NPR CLIP: Some consumers still equate quality with price. That was was not the case in the 28th Annual Eastern Wine Competition. With 2,300 wines in competition, judges awarded a prestigious double gold medal to a $1.99 bottle of California wine, the 2002 Charles Shaw Shiraz.

DB: It would happen again. Its 2005 Chardonnay won top prize at the Cal Expo competition. And then other top awards in Orange County. And so like a lot of young college grads in the 2000s, I started drinking it.

There’ve been a lot of cheap wines over the years, but there was something different about Two Buck Chuck. It became a part of our lives.

KYLE KERCHAERT: In college, Two Buck Chuck was everywhere. I would see the cases of wine replace kegs at parties.

BRYAN YOUNG: I was throwing a party, so we were like, ‘hey, wouldn’t it be great to save money and also have this quirky thing, we’ll just get all this really cheap wine and when people walk in the door, we’ll hand them a bottle of Two Buck Chuck that they just drink straight from the bottle.’

STEPHANIE ASYMKOS: I was newly single, I was living alone for the first time in my life, and I would go to Trader Joe’s, grab frozen dinners, then I’d grab my wine and go home and unwind and I just like to feel that the Two Buck Chuck really elevated the whole experience.

DB: The bottle looks respectable. It even has a cork. The label is downright classy. There’s a little picture of a gazebo on the front and a nice serif font.

After college, my friends and I would serve it at parties and we’d simulate a fancier life than we could actually afford.

But to be honest, at that price, I never thought to question if Charles Shaw is a real person. It’s so generic sounding I just figured someone made it up to make the wine look more legitimate.

But it turns out…

CS: My name is Charles Shaw and I go by Chuck. Almost everyone calls me Chuck. So I always say I’m Chuck Shaw.

DB: This is that wine expert you heard at the top of the show. And as you’ll learn, that is his name and his bottle, but he didn’t make this wine.

[CHUCK HUMMING]

These days, the real Chuck Shaw lives alone in a high rise apartment building in Chicago.

He works overnights on databases at the Chicago Board of Trade.

He’s 74 and he spends his spare time fishing and out on the water. His decor could be described as porch furniture.

CS: I live kind of in a Bohemian thing. I’ve got a – I’ve got a stand up paddleboard is my thing. I’ve got a kayak and you know I’m a sea kayaking guy and I’m a fly fisherman, I’ve got – I’m going fly fishing this week.

DB: But many years ago – long before Two Buck Chuck came into anyone’s consciousness – Chuck Shaw was a winemaker, and he and his wife, Lucy, founded the original Charles Shaw wine label – in the Napa Valley, back in the late ’70s. Few people know the details about this. And it’s a story that Chuck holds close to his heart, even today…

CS: I did feel the whole time I was in Napa Valley that I was really alive. And I haven’t been that way since.

DB: He still has a bunch of nostalgic photos from his winemaking days…

CS: “his is the winery and you can see we had – you know, this is a pretty serious operation and these are 50 acres here...This is all Chardonnay over here. This is Gamay, all this. And this was – this was all Chardonnay, we made that Chardonnay, we made this all sauvignon blanc…

DB: On a shelf, there’s an empty bottle from a 1987 Pinot Noir. There are also framed labels lining his apartment walls: one is a 1988 Gamay Beaujolais Nouveau decorated with fall leaves on the label.

You might be confused if you’ve never heard about the real Chuck Shaw before, but stick with me.

The thing you need to remember about Charles Shaw is that the wine for sale today at Trader Joes — the wine in bottles that look almost identical to the labels on his wall — is not his wine. It’s not his company. But it is trading on his legacy.

DB: So, you’re basically out of the business around ’92 is that right?

CS:Yes, exactly.

DB: And then you have nothing to do with the Charles Shaw brand after that?

CS: Absolutely nothing.

DB: So how did we get here? And who exactly is Charles Shaw?

CS: I was born in Flint, Michigan.

DB: His parents worked at General Motors. After high school, he left for four years at West Point, then the Air Force, where he became an officer, working in what he calls “space matters.” He’d travel around the country negotiating contracts for the Air Force.

He was living in Manhattan Beach in California, where his roommate introduces him to a young woman named Lucy.

They fall in love, quickly married, and had their first child at an air force base. And then came another.

CS: And so I took my family – I had two children at the time – and my wife and we moved to Mountain View, California in the Palo Alto area and lived in the middle of an apricot orchard and went to the Stanford Business School but that’s where I got mixed up in the wine business.

DB: And were you both into wine at this point? is that something you bonded over?

CS: No my my wife Lucy, she never imbibed. She never – she didn’t believe in drinking, didn’t think it was for her and she never has.

DB: And this is long before Californian wine had any reputation right?

CS: It was starting. You know what I mean? It was just starting.

DB: A lot of things were happening in garages near Stanford back then. Some people were starting tech companies. Others were making wine. And they wanted the Stanford students’ help.

So this is where he first gets the wine bug. He graduates from business school in ’71. The family moves to Houston, but he just can’t stop thinking about wine.

Between shifts at his day job at Bank of the Southwest, he’d sneak away here and there to call a distributor in Texas or Louisiana. Then one day, the bank offered him a job in Paris.

CS: I remember the first weekend, I took my mother in law to Bordeaux to see all the – see all the chateaus, I was so excited to see them. We had a little Peugeot and you know took my two children, my wife and we drove down, spent a weekend or a long weekend in Beaujolais and I ended up drinking a lot a Beaujolais for the rest the time I was in Paris.

DB: Beaujolais is good everyday wine. Burgundy is the good stuff for special occasions. At least that’s how Chuck says it works in France.

So basically, Paris brought his wine obsession to new depths…

He’s really taking to French wine culture, and is falling in love with Beaujolais. And he never forgets about those wine pioneers he met at Stanford. But to join them would take some serious capital.

CS: My wife was an heiress to a certain extent. Her family were wealthy rice farmers and she – her grandfather was a very powerful, you know, land owner in southern Texas.

DB: A rice tycoon.

CS: Yeah he was, he was and some of them would have something like 40,000 acres of rice farms.

DB: While they’re in Paris, Lucy inherits something like $300,000. That’s like $1.5 million in today’s money.

Now he has the love of French wine, and they have some cash. They move from Paris to the Napa Valley, and he plots to build a house and plant a vineyard.

But Napa in the ’70s wasn’t like the well-trodden, tourist-friendly wine country it is today. There were more cattle than wineries, almost no hotels. There wasn’t much going on.

DB: Was your wife on board with this plan?

CS: Well I thought so but we moved all the way there and when we got there she – after about a month or two, she said she couldn’t live in Napa Valley, that it was just too much of a shock for her, coming from Paris to go to Napa Valley. And our property was on top of Howell Mountain overlooking Lake Hennessey. You know, geez, like paradise up there. But there were eagles up there, there were rattlesnakes out there. So it was really a shock that she didn’t want to do that.

DB: Lucy was restless and unhappy, isolated in wine country without even the comfort of a good glass of red. So Chuck shelves his plans. But a few years later, his dream of opening a winery is about to come true… he and Lucy find the perfect 35 acres in California.

CS: So we decided to buy it. It was three hundred and some thousand dollars.

DB: That was a lot of money then.

CS: Yeah that was a lot of money but it was planted. In other words it was brand new vineyard. So in terms of planted vineyard, I think we paid like six or seven – seven or eight thousand dollars an acre. Now that Vineyard today is probably about 300 to 500,000 an acre.

DB: Wow.

CS: So you could just see what it was like. Geez.

DB: He had the dream; his wife’s family had the cash. It was an all or nothing gamble.

Lucy’s relatives chipped in $60,000. Lucy put in 25 grand of her own money. The rest he got from loans and cashing in on stock options from a previous job.

All he had to do now was crack open a book on French winemaking a friend had given him, and start growing those Beaujolais grapes he loves.

And he really took to it ! quickly selling early batches to other wineries. Then great reviews roll in, and soon enough, he decides it’s time to put his name on the winery.

Then, Lucy puts in another hundred grand of her money. His dream of bringing French wine culture to America is within sight.

CS: Well, you see, this is where I think that I failed. Ok? This is where I think that the failure and where my problems really fundamentally come from.

DB: Coming up, those problems. There were a lot of them.

ACT II

DB: Ok, we’re back.

Charles Shaw is finally realizing his dream in California. He has a winery. He’s figured out how to make those French wines he enjoyed in Paris. And pretty soon he is selling the stuff!

As the 1980s roll around, Chuck is on his way to some very high highs… and some very low lows.

It was almost….like an opera.

[YES, GIORGIO CLIP]

This is a clip from the movie Yes, Giorgio with Luciano Pavarotti. It’s not exactly the highest point of Pavarotti’s career. It’s not fondly remembered, if it’s remembered at all. But it was a major production by MGM studios…and it was filmed on Chuck’s vineyard.

CS: MGM spent about three weeks there and they built a tennis court in the middle of our Gamay vineyard for the film with that gazebo. And that’s where the packaging came with the gazebo was from the film with Pavarotti.

DB: I had no idea this is why that gazebo was always on the labels of Two Buck Chuck…but this is where it comes from – even though, again, Two Buck Chuck is NOT Chuck Shaw’s wine…don’t worry, we’ll get there.

CS: I ended up liking opera. To this day it has been a great enjoyment to me and prior to that I didn’t even know what one was, you know?

DB: Opera and fine wine go well together. Never mind that Pavarotti was Italian and Chuck was making french wine! These details didn’t matter – Chuck’s plan to bring great everyday French wines to America was starting to work.

His first vintage — 1979 — sold really well. It was Gamay, a kind of Beaujolais. Really good wine, but not too fancy. The kind you might drink on a Wednesday. It might sell for ten or fifteen bucks today.

CS: It is so fruity, when you sit down at the table and the wine glass is poured out, you can smell the aroma just sitting at your table. It’s incredibly beautiful Garnet color, it’s famous for its Garnet colour, which is blue side of red and it’s such a beautiful thing in the glass and it’s so aromatic.

DB: Meanwhile, Lucy still didn’t drink. And this made for some interesting moments in the Napa Valley social scene.

CS: When we had dinner parties, she would put up a sign on the dining room door “no wine talk” and so. (laughs)

DB: How did that go over?

CS: Well you know to her credit, maybe it broadened some of these folks, including myself, because we were so immersed in the business you know what I mean? It was just business, business, business. But perhaps she didn’t you know, she didn’t love it like somebody who was involved in the production and you know in my case making wine and it was such a serious thing, you know. my goodness it was so competitive and you know it’s a competitive business.

DB: That competition demanded a winning strategy, Or… some bets that really paid off. For Chuck, his whole bet here was that he’d make a great everyday wine like the French drank: Gamay — that kind of Beaujolais. And he figured he’d have that corner of the market to himself.

CS: I screwed up I think in strategy because several producers in Napa Valley produced Cabernet Sauvignon. And I considered that competition so if I would do Burgundy wines like Gamay, I wouldn’t have to compete with the guys that were Cabernet, Cabernet, Cabernet and I could niche this thing, plus that’s the popular wine style in Europe. You know so I could be selling to the masses while these guys selling to the fancy trade.

DB: It made sense in theory. But here’s the thing: Americans didn’t know a lot about wine back then. Many thought it was elitist – all of it.

So because there were so many wineries pushing cabernet, Americans were like: oh! That must be what we should drink. Meanwhile, Chuck was just about the only guy selling Gamay. At first, his distributor Wilson Daniels was excited, but then…

CS: It didn’t catch on.

DB: Even though the wine was genuinely GREAT!

CS: We won gold medals in every tasting we were in. And we, I did three White House state dinners with that Gamay. We were put into the Mâcon Fair in France, the Burgundy Fair surreptitiously. So that’s how successful that wine was in terms of amazing quality.

DB: But people weren’t buying it. Chuck had a Gamay glut, and had to find a place to dump it.

CS: I ended up going to Trader Joe, Joe Coulombe down in Pasadena. He’s a Stanford guy. So I go down there, ‘hey Joe you know let’s do a deal.’ And I sold it at a price. He had a truckload sale. You know what I mean?

DB: I know you’re probably thinking this is the beginning of Two Buck Chuck at Trader Joe’s. But it’s not.

It wasn’t sold as Two Buck Chuck then…it is just a coincidence that Chuck Shaw sold his much more valuable wine to Trader Joes, for about $2 a bottle.

See, Napa Valley winemakers back then would often dump their excess product for cheap at Trader Joe’s, but they didn’t want to be associated with bargain wines, so Joe would just sell it quietly — never advertising the labels.

CS: …that way you protect your brand. And so all the Napa wineries if you had inventory problems you would just lay it off to Trader Joe.

DB: Anyway, he learned from that and started diversifying to Chardonnay and Pinot Noir.

And he bounced back — in a big way. He released wines with American Airlines. He had grand openings at fancy hotels. He continued to travel the world with his wine.

DB: And so it sounds like in the mid ’80s things are great.

CS: Yeah.

DB: So what happened?

CS: Well in the mid 80s was what could – what could go wrong? Right. I’ve got five children. It was kind of a – man, it was an intense period of time in the business, meaning people were coming into Napa Valley, they were building hotels and fancy restaurants and you know what I mean? It was just – God it was like a boom you know? And here I was in the midst of it and I was one of, say 18 principal producers. It was just wonderful, so the thing is what could go wrong right?

DB: A lot of things were about to go wrong. This lifestyle and the winery’s growth was all fueled by debt. He used that debt to double production but there wasn’t enough demand. Then, he had an idea to put it in fancy wine barrels, but the supplier coated them in paraffin…

CS: So the wine was polluted by this petroleum flavor.

DB: …and he lost 10,000 cases.

CS: I took one taste of that wine and almost broke my heart.

DB: That wasn’t all. A bug called root louse destroys his main vineyard. This starts to worry his wife and her family who are financing a lot of this. And then to top it off, a bank calls and wants some of its money back.

DB: Did you feel like this was the beginning of the end? I mean what was going through your head?

CS: Well I tell you it makes you uncomfortable to lose that kind of money, you know it’s a stressful – and I think maybe my spouse was saying ‘what a dumb shit. ‘You know what I mean? Because I wasn’t – I don’t think I was attending – enough to her.

And what happened was, I woke up one day on – it was New Year’s Day. And I went out and she turned to me and she was sitting there in bed and said ‘I want a divorce.’

DB: We’ll be right back.

ACT III

DB: Ok, we’re back, and Charles Shaw has just gotten some of the worst news of his life.

CS: It just completely, completely just – I just dropped – I just dropped down you know crying.

DB: And was that totally out of the blue for you? Had you not realized?

CS: Yes. Completely out of the blue. And I was just crushed. And I was desperately in love with my wife, she was a – she’s quite an attractive woman and quite a character.

DB: The Charles Shaw winery might have survived the bad barrels and the sick vines and the overproduction and the banks asking for some money back. It might have survived all that, if Lucy’s family had sunk more money into the whole venture. But they were done.

CS: And so I went to get the capital. And my wife would not allow that because she had decided to divorce me and I wasn’t aware of that. And so when that morning I woke up, she said she wanted a divorce, probably she just lost confidence in me.

DB: If you think that sounds harsh, just remember – without Lucy’s investment, Chuck would never have had any of it. She says in total, she thinks she invested something like $450,000. That’s more than a million in today’s money.

And we asked Lucy about all this. And she said there were other reasons the marriage fell apart.

But with the marriage failing, the business partnership was too.

Someone suggested declaring the whole thing unmanageable so the state would come in and take over the winery.

CS: I was so disappointed about the failing marriage, it just broke my heart.

DB: What happened was Lucy wanted to take control of the winery. If the divorce went through, she and her mother owned enough of it that they could vote to remove Chuck as general partner.

CS: She removed me. It was right in the middle of harvest, 1991 I think it was. She called a meeting and removed me as a general and then in the agreement with Kobrand, they had 30 days to accept a new general partner if Charles Shaw were removed.

DB: But, here’s the twist…

CS: They did not accept Mrs. Shaw as a general partner. And so the distribution of the winery completely collapsed within 30 days of me being removed as a general partner. And so she declared bankruptcy.

DB: They submitted a plan to reorganize, but the court rejected it. A trustee took control.

In its final year, the real Charles Shaw winery had produced 65,000 barrels, and then it was all over.

CS: The winery thing just was a secondary thing to me. I just couldn’t get over the – I was on the vestry of my church for all those years. You know what I mean? And I coached the football – the kids football in town. And I just didn’t feel like much of an example. You know? And I just – it just crushed me. I’m from the Midwest. I’m a religious man. And it just damn near, I just damn near died.

DB: After this huge loss, something else is taken from Chuck – his name.

The trustee for the winery now owned the Charles Shaw brand and label design.

A couple of marketing guys from the famous Robert Mondavi winery realize, ‘hey, that brand is worth something’.

So they scoop it up, and immediately sell it to Fred Franzia, a savvy businessman who mass produces wine at his Bronco Wine Company – remember that name.

After the collapse of the winery, he heads east and eventually ends up in Chicago where he tries to build a new life. He had no idea his name and label had been sold.

But back in California his brand name and that label design with the gazebo are sitting on a shelf at the Bronco Wine Company.

Now, Bronco is not known for fine wine. It produces on a mass scale in huge industrial tanks.

Its grapes are grown in the far less prestigious Central Valley. If they’re aged at all, it’s on the highway to the plant near the Napa airport so it can say it’s from that region.

Some call it a “zip code winery.”

Fred Franzia is savvy – he built Bronco by buying up names and labels from bankrupt wineries.

He bought the Charles Shaw brand name for $27,000 and just held onto it.

That is, until 2002.

It’s after 9/11. There’s a recession, which led to a big wine surplus, and that’s when Fred looks at all the labels he’d bought up over the years, but never used, and pulls one off the shelf.

You guessed it: Charles Shaw.

And in an ironic repeat of history, Fred takes it down to none other than Trader Joe’s to go back back on the shelf, with a $2 label.

And this is the moment that the Two Buck Chuck we know today, is born.

DB: How did you first find out about that?

CS: I think Joe sent me a note. Joe Coulombe.

DB: You know, the founder of Trader Joe’s.

DB: Was this a total surprise when this showed up at Trader Joe’s in 2002?

CS: Yeah, complete surprise.

DB: What was your first reaction?

CS: I was all upset!

DB: All of a sudden other wine folks from Napa start noticing this old prestigious brand is being sold for a couple of bucks.

CS: I just thought it was terrible because my friends in Napa Valley blame me for this low priced, former Napa brand coming in and making them – I think some of them felt it was making them look bad.

DB: This is the kind of elite wine world Charles Shaw belonged to – a pretty far cry from the Bronco world of bargain bottles!

CS: You know and here I was trying to tell my old Napa Valley vintner guys that it wasn’t me that did it.

DB: It’s been 16 years since then…and Two Buck Chuck’s still going strong. And over the years, Chuck Shaw has come to terms with it all…

CS: Well, today my reaction is exactly the opposite. I am just thrilled.

DB: He pulls out the May 2017 Trader Joe’s newsletter celebrating the 15th anniversary of the wine. A billion bottles.

Bronco has been able to keep costs down by running things very differently than the real Chuck Shaw. Bulk production, cheap corks, cheep bottling, cheap shipping, cheap real estate costs. Everything is pretty cheap. And that’s the point. The masses don’t always need fancy French wines as Chuck thought.

CS: So what my point is now is wait a minute. If it weren’t for these guys, we would be nothing. No one would even know who we are and what we did.

I failed. Yeah sure I failed. But I went to talk to Stanford last year, and the kids all come up to me and said ‘Oh God it’s great. You know hell all the dorms love it. You know all of the fraternities and sororities love it’ so can’t be all bad. So I think what the hell you know?

DB: Have you seen a penny from those billion bottles?

CS: No. No. Not a penny.

DB: He’s not the first person in business to lose control of his name. He’s not the first to watch someone else make millions off something he built. But it still stinks, right?

DB: Do you ever think you know if you had had some rights to that name like what what would they have done for your life?

CS: Well make it different, wouldn’t it?

And here is the – a state dinner for the prime minister of the Islamic Republic of Pakistan…

DB: After he had shown us pictures of state dinners, an unopened 1988 Charles Shaw Sauvignon Blanc, and old magazine articles about his winery, we pull out that 2014 Charles Shaw Merlot from Trader Joe’s. Before he tasted it, he had one request.

CS: Do you mind if I sign this?

DB: He signs right on the label next to that gazebo from the Pavarotti film.

CS: Whew!

DB: After his divorce, Charles F. Shaw tried to spoil his kids to curry their favor. He found new jobs and new cities. He even tried to start a winery in Michigan. But in the end, Two Buck Chuck at Trader Joe’s has become his legacy, too.

CS: If somebody hears my name, like I’ll be in a restaurant and they’ll look at my credit card. And typically it will be a joke. ‘Oh you must be Two Buck Chuck.’ You know what I mean? That’s what they always say.

DB: And then what do you say?

CS: I say ‘Well yeah I am the founder of that winery. I have nothing to do with it now. But interestingly enough 40 years ago I did.’

DB: Next time you see some 2 buck chuck on the shelf…spare a thought for the real Chuck Shaw.

That’s not the end of today’s episode though – now we’re going to dive into something we call Product Misplacement.

This is the part of this show where we get to hear from YOU, about how brands have infiltrated YOUR life.

We want to know where a major brand was during a specific moment of your life.

The reason I started this show is because I think it’s pretty hard to avoid contact with brands in most of what we do.

They’re attached to so much of our lives,  they become the intertwined with significant moments and memories… maybe you cringe every time you see a Windex bottle? Or Target’s parking lot sends you back to a certain argument…or if you’re like me…you get a lump in your throat when you see an Olive Garden.

Our first Product Misplacement story comes to us from Mindy Eskow, in San Francisco.

MINDY ESKOW: I had a very exhilarating love life in middle school. AOL Messenger was kind of THE place to be, where you can message your crush with a conversation of: ‘Hey!’ ‘Hey!’ ‘What’s up?’ “Nothing much, you?’ ‘Nothing much.’

My actual middle school crush only Yahoo Messenger. I got a Yahoo email address just so we could instance message. Our conversations were so much more than the classic ‘Hey!’ ‘Hey!’ ‘What’s up?’ conversations I was so used to having at age 12 and I thought that meant we were definitely going to date.

He mentioned that his favorite breakfast item was a type of Quaker oatmeal called Dinosaur Eggs. I wasn’t really a breakfast person but I immediately feigned interest anyways. Dinosaur Eggs oatmeal is a microwavable oatmeal that comes with these little eggs of sugar that hatch into dinosaurs when you microwave it. So like any independent middle schooler, I made it my thing to love Dinosaur Eggs oatmeal so it would later become our thing.

My mom wasn’t super keen on sugary breakfasts, but I think the word “oatmeal” kind of tricked her into buying it for me. It later became a ritual to go to school, be too shy to talk to Trent in person, and then go home and message him about the Dinosaur Eggs oatmeal we ate that day. He even gave me a box of it wrapped with a bow for my birthday one year, which remains one of the most romantic gifts I have ever received.

And then one day, Trent started dating one of my best friends, and my romantic interest in him disintegrated faster than a dinosaur egg in oatmeal. If the year I mostly ate Dinosaur Eggs oatmeal taught me anything, it was about how quickly things in life change, whether it be an egg changing into a dinosaur, or how quickly I could change from loving Dinosaur Eggs oatmeal to never wanting to eat it again.

DB: Love and loss. Thanks Mindy!

Tell us your product placement story! You can record it straight into your phone and then email householdname@businessinsider.com, OR just call 731-3-BRANDS and leave us a message with your name and contact info. That’s 731-3-BRANDS.

CREDITS

DB: To hear Household Name without ads AND to get access to the first SIX episodes…sign up for Stitcher Premium at stitcherpremium.com/householdname and use promo code: HOUSEHOLD for your first month free. And we want to be a household name in the podcast world, so rate and review us to help us get into every home in America, it really helps. 

This episode was produced and reported by me, Dan Bobkoff, who wants you to know that he is not too pleased with new Charles Shaw labels that no longer feature a gazebo. Anna Mazarakis also produced this episode, she loves herself some two buck Pinot Grigio—no judgement there. Our senior producer is Clare Rawlinson, who grew up in Australia, where something called “Passion Pop” played the role of Two Buck Chuck. She was a passionate, Passion Popper.

Mixing, sound design and original theme music by Casey Holford and John DeLore—I wager they’re more craft beer kinda guys. Our editor is Peter Clowney, and he remains very confused by the pricing of Two Buck Chuck. 

Our executive producers at Stitcher are Chris Bannon, Laura Mayer and Jenny Radelet. Special thanks to Natalie O’Neill, Arabella Breck, Stephanie Asymkos, and Kyle Kirkhart. 

Household Name is a production of Insider Audio.

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

You must be logged in to post a comment Login

Leave a Reply


Uncategorized

Options trading 4. Trader Joe’s No-Buck Chuck

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS:…

Options trading

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS: Product Misplacement with Mindy Eskow.

Reported and produced by Dan Bobkoff, with Anna Mazarakis and Clare Rawlinson.

Read more:

Options trading Transcript

Note: This transcript may contain errors.

DAN BOBKOFF: Quick note before we start: this episode has one moment of foul language. You might not even notice, but it’s there. So watch out, kiddos.

CHARLES SHAW: [pouring wine] So let’s pour it out. See what we got.

DB: This is a wine expert who really knows his stuff…

CS: So the first thing we’re going to look for is aroma. A fine wine has actual qualities of the grape, and you can smell the fruitiness of the grape, and frankly, I can smell some fruit in this wine. This is amazing.

DB: So we brought him a bottle to get his take.

CS: So I’m going to taste it.

DB: It’s a merlot, but not a kind he would normally buy.

CS: First thing I would do is put it under my tongue, and I picked up some decent acidity. It’s not bad. It’s a little dry. It’s got some tannin. And then I’m just going to put it in my mouth and see what I think. I think this is a very satisfying wine.

DB: Especially for under three dollars. … That wine? It’s Charles Shaw.

From Business Insider and Stitcher, this is Household Name, the show about brands you know, and stories you don’t. I’m Dan Bobkoff.

Since 2002, the grocery chain Trader Joe’s has sold nearly a billion bottles of Charles Shaw wine.

It’s popular in large part because it’s cheap. Just two or three dollars. That’s why it became known as Two Buck Chuck.

But there is a real man named Charles Shaw. He has almost nothing to do with how the bottle with his name on it became so popular.

HIS story is a tale of love and loss. Boom and bust. A pioneer ahead of his time. And then mistakes, unintended consequences and a surprising rebirth.

Stay with us.

ACT I

DB: The first time I heard of Charles Shaw wine was in the early 2000s. I was in college. And it was starting to make news as this great underdog story. This ultra cheap wine I could actually afford was apparently as good as the expensive guys. Even NPR was reporting on it.

NPR CLIP: Some consumers still equate quality with price. That was was not the case in the 28th Annual Eastern Wine Competition. With 2,300 wines in competition, judges awarded a prestigious double gold medal to a $1.99 bottle of California wine, the 2002 Charles Shaw Shiraz.

DB: It would happen again. Its 2005 Chardonnay won top prize at the Cal Expo competition. And then other top awards in Orange County. And so like a lot of young college grads in the 2000s, I started drinking it.

There’ve been a lot of cheap wines over the years, but there was something different about Two Buck Chuck. It became a part of our lives.

KYLE KERCHAERT: In college, Two Buck Chuck was everywhere. I would see the cases of wine replace kegs at parties.

BRYAN YOUNG: I was throwing a party, so we were like, ‘hey, wouldn’t it be great to save money and also have this quirky thing, we’ll just get all this really cheap wine and when people walk in the door, we’ll hand them a bottle of Two Buck Chuck that they just drink straight from the bottle.’

STEPHANIE ASYMKOS: I was newly single, I was living alone for the first time in my life, and I would go to Trader Joe’s, grab frozen dinners, then I’d grab my wine and go home and unwind and I just like to feel that the Two Buck Chuck really elevated the whole experience.

DB: The bottle looks respectable. It even has a cork. The label is downright classy. There’s a little picture of a gazebo on the front and a nice serif font.

After college, my friends and I would serve it at parties and we’d simulate a fancier life than we could actually afford.

But to be honest, at that price, I never thought to question if Charles Shaw is a real person. It’s so generic sounding I just figured someone made it up to make the wine look more legitimate.

But it turns out…

CS: My name is Charles Shaw and I go by Chuck. Almost everyone calls me Chuck. So I always say I’m Chuck Shaw.

DB: This is that wine expert you heard at the top of the show. And as you’ll learn, that is his name and his bottle, but he didn’t make this wine.

[CHUCK HUMMING]

These days, the real Chuck Shaw lives alone in a high rise apartment building in Chicago.

He works overnights on databases at the Chicago Board of Trade.

He’s 74 and he spends his spare time fishing and out on the water. His decor could be described as porch furniture.

CS: I live kind of in a Bohemian thing. I’ve got a – I’ve got a stand up paddleboard is my thing. I’ve got a kayak and you know I’m a sea kayaking guy and I’m a fly fisherman, I’ve got – I’m going fly fishing this week.

DB: But many years ago – long before Two Buck Chuck came into anyone’s consciousness – Chuck Shaw was a winemaker, and he and his wife, Lucy, founded the original Charles Shaw wine label – in the Napa Valley, back in the late ’70s. Few people know the details about this. And it’s a story that Chuck holds close to his heart, even today…

CS: I did feel the whole time I was in Napa Valley that I was really alive. And I haven’t been that way since.

DB: He still has a bunch of nostalgic photos from his winemaking days…

CS: “his is the winery and you can see we had – you know, this is a pretty serious operation and these are 50 acres here...This is all Chardonnay over here. This is Gamay, all this. And this was – this was all Chardonnay, we made that Chardonnay, we made this all sauvignon blanc…

DB: On a shelf, there’s an empty bottle from a 1987 Pinot Noir. There are also framed labels lining his apartment walls: one is a 1988 Gamay Beaujolais Nouveau decorated with fall leaves on the label.

You might be confused if you’ve never heard about the real Chuck Shaw before, but stick with me.

The thing you need to remember about Charles Shaw is that the wine for sale today at Trader Joes — the wine in bottles that look almost identical to the labels on his wall — is not his wine. It’s not his company. But it is trading on his legacy.

DB: So, you’re basically out of the business around ’92 is that right?

CS:Yes, exactly.

DB: And then you have nothing to do with the Charles Shaw brand after that?

CS: Absolutely nothing.

DB: So how did we get here? And who exactly is Charles Shaw?

CS: I was born in Flint, Michigan.

DB: His parents worked at General Motors. After high school, he left for four years at West Point, then the Air Force, where he became an officer, working in what he calls “space matters.” He’d travel around the country negotiating contracts for the Air Force.

He was living in Manhattan Beach in California, where his roommate introduces him to a young woman named Lucy.

They fall in love, quickly married, and had their first child at an air force base. And then came another.

CS: And so I took my family – I had two children at the time – and my wife and we moved to Mountain View, California in the Palo Alto area and lived in the middle of an apricot orchard and went to the Stanford Business School but that’s where I got mixed up in the wine business.

DB: And were you both into wine at this point? is that something you bonded over?

CS: No my my wife Lucy, she never imbibed. She never – she didn’t believe in drinking, didn’t think it was for her and she never has.

DB: And this is long before Californian wine had any reputation right?

CS: It was starting. You know what I mean? It was just starting.

DB: A lot of things were happening in garages near Stanford back then. Some people were starting tech companies. Others were making wine. And they wanted the Stanford students’ help.

So this is where he first gets the wine bug. He graduates from business school in ’71. The family moves to Houston, but he just can’t stop thinking about wine.

Between shifts at his day job at Bank of the Southwest, he’d sneak away here and there to call a distributor in Texas or Louisiana. Then one day, the bank offered him a job in Paris.

CS: I remember the first weekend, I took my mother in law to Bordeaux to see all the – see all the chateaus, I was so excited to see them. We had a little Peugeot and you know took my two children, my wife and we drove down, spent a weekend or a long weekend in Beaujolais and I ended up drinking a lot a Beaujolais for the rest the time I was in Paris.

DB: Beaujolais is good everyday wine. Burgundy is the good stuff for special occasions. At least that’s how Chuck says it works in France.

So basically, Paris brought his wine obsession to new depths…

He’s really taking to French wine culture, and is falling in love with Beaujolais. And he never forgets about those wine pioneers he met at Stanford. But to join them would take some serious capital.

CS: My wife was an heiress to a certain extent. Her family were wealthy rice farmers and she – her grandfather was a very powerful, you know, land owner in southern Texas.

DB: A rice tycoon.

CS: Yeah he was, he was and some of them would have something like 40,000 acres of rice farms.

DB: While they’re in Paris, Lucy inherits something like $300,000. That’s like $1.5 million in today’s money.

Now he has the love of French wine, and they have some cash. They move from Paris to the Napa Valley, and he plots to build a house and plant a vineyard.

But Napa in the ’70s wasn’t like the well-trodden, tourist-friendly wine country it is today. There were more cattle than wineries, almost no hotels. There wasn’t much going on.

DB: Was your wife on board with this plan?

CS: Well I thought so but we moved all the way there and when we got there she – after about a month or two, she said she couldn’t live in Napa Valley, that it was just too much of a shock for her, coming from Paris to go to Napa Valley. And our property was on top of Howell Mountain overlooking Lake Hennessey. You know, geez, like paradise up there. But there were eagles up there, there were rattlesnakes out there. So it was really a shock that she didn’t want to do that.

DB: Lucy was restless and unhappy, isolated in wine country without even the comfort of a good glass of red. So Chuck shelves his plans. But a few years later, his dream of opening a winery is about to come true… he and Lucy find the perfect 35 acres in California.

CS: So we decided to buy it. It was three hundred and some thousand dollars.

DB: That was a lot of money then.

CS: Yeah that was a lot of money but it was planted. In other words it was brand new vineyard. So in terms of planted vineyard, I think we paid like six or seven – seven or eight thousand dollars an acre. Now that Vineyard today is probably about 300 to 500,000 an acre.

DB: Wow.

CS: So you could just see what it was like. Geez.

DB: He had the dream; his wife’s family had the cash. It was an all or nothing gamble.

Lucy’s relatives chipped in $60,000. Lucy put in 25 grand of her own money. The rest he got from loans and cashing in on stock options from a previous job.

All he had to do now was crack open a book on French winemaking a friend had given him, and start growing those Beaujolais grapes he loves.

And he really took to it ! quickly selling early batches to other wineries. Then great reviews roll in, and soon enough, he decides it’s time to put his name on the winery.

Then, Lucy puts in another hundred grand of her money. His dream of bringing French wine culture to America is within sight.

CS: Well, you see, this is where I think that I failed. Ok? This is where I think that the failure and where my problems really fundamentally come from.

DB: Coming up, those problems. There were a lot of them.

ACT II

DB: Ok, we’re back.

Charles Shaw is finally realizing his dream in California. He has a winery. He’s figured out how to make those French wines he enjoyed in Paris. And pretty soon he is selling the stuff!

As the 1980s roll around, Chuck is on his way to some very high highs… and some very low lows.

It was almost….like an opera.

[YES, GIORGIO CLIP]

This is a clip from the movie Yes, Giorgio with Luciano Pavarotti. It’s not exactly the highest point of Pavarotti’s career. It’s not fondly remembered, if it’s remembered at all. But it was a major production by MGM studios…and it was filmed on Chuck’s vineyard.

CS: MGM spent about three weeks there and they built a tennis court in the middle of our Gamay vineyard for the film with that gazebo. And that’s where the packaging came with the gazebo was from the film with Pavarotti.

DB: I had no idea this is why that gazebo was always on the labels of Two Buck Chuck…but this is where it comes from – even though, again, Two Buck Chuck is NOT Chuck Shaw’s wine…don’t worry, we’ll get there.

CS: I ended up liking opera. To this day it has been a great enjoyment to me and prior to that I didn’t even know what one was, you know?

DB: Opera and fine wine go well together. Never mind that Pavarotti was Italian and Chuck was making french wine! These details didn’t matter – Chuck’s plan to bring great everyday French wines to America was starting to work.

His first vintage — 1979 — sold really well. It was Gamay, a kind of Beaujolais. Really good wine, but not too fancy. The kind you might drink on a Wednesday. It might sell for ten or fifteen bucks today.

CS: It is so fruity, when you sit down at the table and the wine glass is poured out, you can smell the aroma just sitting at your table. It’s incredibly beautiful Garnet color, it’s famous for its Garnet colour, which is blue side of red and it’s such a beautiful thing in the glass and it’s so aromatic.

DB: Meanwhile, Lucy still didn’t drink. And this made for some interesting moments in the Napa Valley social scene.

CS: When we had dinner parties, she would put up a sign on the dining room door “no wine talk” and so. (laughs)

DB: How did that go over?

CS: Well you know to her credit, maybe it broadened some of these folks, including myself, because we were so immersed in the business you know what I mean? It was just business, business, business. But perhaps she didn’t you know, she didn’t love it like somebody who was involved in the production and you know in my case making wine and it was such a serious thing, you know. my goodness it was so competitive and you know it’s a competitive business.

DB: That competition demanded a winning strategy, Or… some bets that really paid off. For Chuck, his whole bet here was that he’d make a great everyday wine like the French drank: Gamay — that kind of Beaujolais. And he figured he’d have that corner of the market to himself.

CS: I screwed up I think in strategy because several producers in Napa Valley produced Cabernet Sauvignon. And I considered that competition so if I would do Burgundy wines like Gamay, I wouldn’t have to compete with the guys that were Cabernet, Cabernet, Cabernet and I could niche this thing, plus that’s the popular wine style in Europe. You know so I could be selling to the masses while these guys selling to the fancy trade.

DB: It made sense in theory. But here’s the thing: Americans didn’t know a lot about wine back then. Many thought it was elitist – all of it.

So because there were so many wineries pushing cabernet, Americans were like: oh! That must be what we should drink. Meanwhile, Chuck was just about the only guy selling Gamay. At first, his distributor Wilson Daniels was excited, but then…

CS: It didn’t catch on.

DB: Even though the wine was genuinely GREAT!

CS: We won gold medals in every tasting we were in. And we, I did three White House state dinners with that Gamay. We were put into the Mâcon Fair in France, the Burgundy Fair surreptitiously. So that’s how successful that wine was in terms of amazing quality.

DB: But people weren’t buying it. Chuck had a Gamay glut, and had to find a place to dump it.

CS: I ended up going to Trader Joe, Joe Coulombe down in Pasadena. He’s a Stanford guy. So I go down there, ‘hey Joe you know let’s do a deal.’ And I sold it at a price. He had a truckload sale. You know what I mean?

DB: I know you’re probably thinking this is the beginning of Two Buck Chuck at Trader Joe’s. But it’s not.

It wasn’t sold as Two Buck Chuck then…it is just a coincidence that Chuck Shaw sold his much more valuable wine to Trader Joes, for about $2 a bottle.

See, Napa Valley winemakers back then would often dump their excess product for cheap at Trader Joe’s, but they didn’t want to be associated with bargain wines, so Joe would just sell it quietly — never advertising the labels.

CS: …that way you protect your brand. And so all the Napa wineries if you had inventory problems you would just lay it off to Trader Joe.

DB: Anyway, he learned from that and started diversifying to Chardonnay and Pinot Noir.

And he bounced back — in a big way. He released wines with American Airlines. He had grand openings at fancy hotels. He continued to travel the world with his wine.

DB: And so it sounds like in the mid ’80s things are great.

CS: Yeah.

DB: So what happened?

CS: Well in the mid 80s was what could – what could go wrong? Right. I’ve got five children. It was kind of a – man, it was an intense period of time in the business, meaning people were coming into Napa Valley, they were building hotels and fancy restaurants and you know what I mean? It was just – God it was like a boom you know? And here I was in the midst of it and I was one of, say 18 principal producers. It was just wonderful, so the thing is what could go wrong right?

DB: A lot of things were about to go wrong. This lifestyle and the winery’s growth was all fueled by debt. He used that debt to double production but there wasn’t enough demand. Then, he had an idea to put it in fancy wine barrels, but the supplier coated them in paraffin…

CS: So the wine was polluted by this petroleum flavor.

DB: …and he lost 10,000 cases.

CS: I took one taste of that wine and almost broke my heart.

DB: That wasn’t all. A bug called root louse destroys his main vineyard. This starts to worry his wife and her family who are financing a lot of this. And then to top it off, a bank calls and wants some of its money back.

DB: Did you feel like this was the beginning of the end? I mean what was going through your head?

CS: Well I tell you it makes you uncomfortable to lose that kind of money, you know it’s a stressful – and I think maybe my spouse was saying ‘what a dumb shit. ‘You know what I mean? Because I wasn’t – I don’t think I was attending – enough to her.

And what happened was, I woke up one day on – it was New Year’s Day. And I went out and she turned to me and she was sitting there in bed and said ‘I want a divorce.’

DB: We’ll be right back.

ACT III

DB: Ok, we’re back, and Charles Shaw has just gotten some of the worst news of his life.

CS: It just completely, completely just – I just dropped – I just dropped down you know crying.

DB: And was that totally out of the blue for you? Had you not realized?

CS: Yes. Completely out of the blue. And I was just crushed. And I was desperately in love with my wife, she was a – she’s quite an attractive woman and quite a character.

DB: The Charles Shaw winery might have survived the bad barrels and the sick vines and the overproduction and the banks asking for some money back. It might have survived all that, if Lucy’s family had sunk more money into the whole venture. But they were done.

CS: And so I went to get the capital. And my wife would not allow that because she had decided to divorce me and I wasn’t aware of that. And so when that morning I woke up, she said she wanted a divorce, probably she just lost confidence in me.

DB: If you think that sounds harsh, just remember – without Lucy’s investment, Chuck would never have had any of it. She says in total, she thinks she invested something like $450,000. That’s more than a million in today’s money.

And we asked Lucy about all this. And she said there were other reasons the marriage fell apart.

But with the marriage failing, the business partnership was too.

Someone suggested declaring the whole thing unmanageable so the state would come in and take over the winery.

CS: I was so disappointed about the failing marriage, it just broke my heart.

DB: What happened was Lucy wanted to take control of the winery. If the divorce went through, she and her mother owned enough of it that they could vote to remove Chuck as general partner.

CS: She removed me. It was right in the middle of harvest, 1991 I think it was. She called a meeting and removed me as a general and then in the agreement with Kobrand, they had 30 days to accept a new general partner if Charles Shaw were removed.

DB: But, here’s the twist…

CS: They did not accept Mrs. Shaw as a general partner. And so the distribution of the winery completely collapsed within 30 days of me being removed as a general partner. And so she declared bankruptcy.

DB: They submitted a plan to reorganize, but the court rejected it. A trustee took control.

In its final year, the real Charles Shaw winery had produced 65,000 barrels, and then it was all over.

CS: The winery thing just was a secondary thing to me. I just couldn’t get over the – I was on the vestry of my church for all those years. You know what I mean? And I coached the football – the kids football in town. And I just didn’t feel like much of an example. You know? And I just – it just crushed me. I’m from the Midwest. I’m a religious man. And it just damn near, I just damn near died.

DB: After this huge loss, something else is taken from Chuck – his name.

The trustee for the winery now owned the Charles Shaw brand and label design.

A couple of marketing guys from the famous Robert Mondavi winery realize, ‘hey, that brand is worth something’.

So they scoop it up, and immediately sell it to Fred Franzia, a savvy businessman who mass produces wine at his Bronco Wine Company – remember that name.

After the collapse of the winery, he heads east and eventually ends up in Chicago where he tries to build a new life. He had no idea his name and label had been sold.

But back in California his brand name and that label design with the gazebo are sitting on a shelf at the Bronco Wine Company.

Now, Bronco is not known for fine wine. It produces on a mass scale in huge industrial tanks.

Its grapes are grown in the far less prestigious Central Valley. If they’re aged at all, it’s on the highway to the plant near the Napa airport so it can say it’s from that region.

Some call it a “zip code winery.”

Fred Franzia is savvy – he built Bronco by buying up names and labels from bankrupt wineries.

He bought the Charles Shaw brand name for $27,000 and just held onto it.

That is, until 2002.

It’s after 9/11. There’s a recession, which led to a big wine surplus, and that’s when Fred looks at all the labels he’d bought up over the years, but never used, and pulls one off the shelf.

You guessed it: Charles Shaw.

And in an ironic repeat of history, Fred takes it down to none other than Trader Joe’s to go back back on the shelf, with a $2 label.

And this is the moment that the Two Buck Chuck we know today, is born.

DB: How did you first find out about that?

CS: I think Joe sent me a note. Joe Coulombe.

DB: You know, the founder of Trader Joe’s.

DB: Was this a total surprise when this showed up at Trader Joe’s in 2002?

CS: Yeah, complete surprise.

DB: What was your first reaction?

CS: I was all upset!

DB: All of a sudden other wine folks from Napa start noticing this old prestigious brand is being sold for a couple of bucks.

CS: I just thought it was terrible because my friends in Napa Valley blame me for this low priced, former Napa brand coming in and making them – I think some of them felt it was making them look bad.

DB: This is the kind of elite wine world Charles Shaw belonged to – a pretty far cry from the Bronco world of bargain bottles!

CS: You know and here I was trying to tell my old Napa Valley vintner guys that it wasn’t me that did it.

DB: It’s been 16 years since then…and Two Buck Chuck’s still going strong. And over the years, Chuck Shaw has come to terms with it all…

CS: Well, today my reaction is exactly the opposite. I am just thrilled.

DB: He pulls out the May 2017 Trader Joe’s newsletter celebrating the 15th anniversary of the wine. A billion bottles.

Bronco has been able to keep costs down by running things very differently than the real Chuck Shaw. Bulk production, cheap corks, cheep bottling, cheap shipping, cheap real estate costs. Everything is pretty cheap. And that’s the point. The masses don’t always need fancy French wines as Chuck thought.

CS: So what my point is now is wait a minute. If it weren’t for these guys, we would be nothing. No one would even know who we are and what we did.

I failed. Yeah sure I failed. But I went to talk to Stanford last year, and the kids all come up to me and said ‘Oh God it’s great. You know hell all the dorms love it. You know all of the fraternities and sororities love it’ so can’t be all bad. So I think what the hell you know?

DB: Have you seen a penny from those billion bottles?

CS: No. No. Not a penny.

DB: He’s not the first person in business to lose control of his name. He’s not the first to watch someone else make millions off something he built. But it still stinks, right?

DB: Do you ever think you know if you had had some rights to that name like what what would they have done for your life?

CS: Well make it different, wouldn’t it?

And here is the – a state dinner for the prime minister of the Islamic Republic of Pakistan…

DB: After he had shown us pictures of state dinners, an unopened 1988 Charles Shaw Sauvignon Blanc, and old magazine articles about his winery, we pull out that 2014 Charles Shaw Merlot from Trader Joe’s. Before he tasted it, he had one request.

CS: Do you mind if I sign this?

DB: He signs right on the label next to that gazebo from the Pavarotti film.

CS: Whew!

DB: After his divorce, Charles F. Shaw tried to spoil his kids to curry their favor. He found new jobs and new cities. He even tried to start a winery in Michigan. But in the end, Two Buck Chuck at Trader Joe’s has become his legacy, too.

CS: If somebody hears my name, like I’ll be in a restaurant and they’ll look at my credit card. And typically it will be a joke. ‘Oh you must be Two Buck Chuck.’ You know what I mean? That’s what they always say.

DB: And then what do you say?

CS: I say ‘Well yeah I am the founder of that winery. I have nothing to do with it now. But interestingly enough 40 years ago I did.’

DB: Next time you see some 2 buck chuck on the shelf…spare a thought for the real Chuck Shaw.

That’s not the end of today’s episode though – now we’re going to dive into something we call Product Misplacement.

This is the part of this show where we get to hear from YOU, about how brands have infiltrated YOUR life.

We want to know where a major brand was during a specific moment of your life.

The reason I started this show is because I think it’s pretty hard to avoid contact with brands in most of what we do.

They’re attached to so much of our lives,  they become the intertwined with significant moments and memories… maybe you cringe every time you see a Windex bottle? Or Target’s parking lot sends you back to a certain argument…or if you’re like me…you get a lump in your throat when you see an Olive Garden.

Our first Product Misplacement story comes to us from Mindy Eskow, in San Francisco.

MINDY ESKOW: I had a very exhilarating love life in middle school. AOL Messenger was kind of THE place to be, where you can message your crush with a conversation of: ‘Hey!’ ‘Hey!’ ‘What’s up?’ “Nothing much, you?’ ‘Nothing much.’

My actual middle school crush only Yahoo Messenger. I got a Yahoo email address just so we could instance message. Our conversations were so much more than the classic ‘Hey!’ ‘Hey!’ ‘What’s up?’ conversations I was so used to having at age 12 and I thought that meant we were definitely going to date.

He mentioned that his favorite breakfast item was a type of Quaker oatmeal called Dinosaur Eggs. I wasn’t really a breakfast person but I immediately feigned interest anyways. Dinosaur Eggs oatmeal is a microwavable oatmeal that comes with these little eggs of sugar that hatch into dinosaurs when you microwave it. So like any independent middle schooler, I made it my thing to love Dinosaur Eggs oatmeal so it would later become our thing.

My mom wasn’t super keen on sugary breakfasts, but I think the word “oatmeal” kind of tricked her into buying it for me. It later became a ritual to go to school, be too shy to talk to Trent in person, and then go home and message him about the Dinosaur Eggs oatmeal we ate that day. He even gave me a box of it wrapped with a bow for my birthday one year, which remains one of the most romantic gifts I have ever received.

And then one day, Trent started dating one of my best friends, and my romantic interest in him disintegrated faster than a dinosaur egg in oatmeal. If the year I mostly ate Dinosaur Eggs oatmeal taught me anything, it was about how quickly things in life change, whether it be an egg changing into a dinosaur, or how quickly I could change from loving Dinosaur Eggs oatmeal to never wanting to eat it again.

DB: Love and loss. Thanks Mindy!

Tell us your product placement story! You can record it straight into your phone and then email householdname@businessinsider.com, OR just call 731-3-BRANDS and leave us a message with your name and contact info. That’s 731-3-BRANDS.

CREDITS

DB: To hear Household Name without ads AND to get access to the first SIX episodes…sign up for Stitcher Premium at stitcherpremium.com/householdname and use promo code: HOUSEHOLD for your first month free. And we want to be a household name in the podcast world, so rate and review us to help us get into every home in America, it really helps. 

This episode was produced and reported by me, Dan Bobkoff, who wants you to know that he is not too pleased with new Charles Shaw labels that no longer feature a gazebo. Anna Mazarakis also produced this episode, she loves herself some two buck Pinot Grigio—no judgement there. Our senior producer is Clare Rawlinson, who grew up in Australia, where something called “Passion Pop” played the role of Two Buck Chuck. She was a passionate, Passion Popper.

Mixing, sound design and original theme music by Casey Holford and John DeLore—I wager they’re more craft beer kinda guys. Our editor is Peter Clowney, and he remains very confused by the pricing of Two Buck Chuck. 

Our executive producers at Stitcher are Chris Bannon, Laura Mayer and Jenny Radelet. Special thanks to Natalie O’Neill, Arabella Breck, Stephanie Asymkos, and Kyle Kirkhart. 

Household Name is a production of Insider Audio.

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

You must be logged in to post a comment Login

Leave a Reply


Uncategorized

Options trading 4. Trader Joe’s No-Buck Chuck

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS:…

Options trading

Trader Joe’s “Two-Buck Chuck” is the wine that got many of us through college. But when we found out that “Chuck” – or Charles Shaw – is a real guy, we had to know more. Turns out the real Charles Shaw has a wild wine making past full of gambles, heartbreak, and cruel ironies. PLUS: Product Misplacement with Mindy Eskow.

Reported and produced by Dan Bobkoff, with Anna Mazarakis and Clare Rawlinson.

Read more:

Options trading Transcript

Note: This transcript may contain errors.

DAN BOBKOFF: Quick note before we start: this episode has one moment of foul language. You might not even notice, but it’s there. So watch out, kiddos.

CHARLES SHAW: [pouring wine] So let’s pour it out. See what we got.

DB: This is a wine expert who really knows his stuff…

CS: So the first thing we’re going to look for is aroma. A fine wine has actual qualities of the grape, and you can smell the fruitiness of the grape, and frankly, I can smell some fruit in this wine. This is amazing.

DB: So we brought him a bottle to get his take.

CS: So I’m going to taste it.

DB: It’s a merlot, but not a kind he would normally buy.

CS: First thing I would do is put it under my tongue, and I picked up some decent acidity. It’s not bad. It’s a little dry. It’s got some tannin. And then I’m just going to put it in my mouth and see what I think. I think this is a very satisfying wine.

DB: Especially for under three dollars. … That wine? It’s Charles Shaw.

From Business Insider and Stitcher, this is Household Name, the show about brands you know, and stories you don’t. I’m Dan Bobkoff.

Since 2002, the grocery chain Trader Joe’s has sold nearly a billion bottles of Charles Shaw wine.

It’s popular in large part because it’s cheap. Just two or three dollars. That’s why it became known as Two Buck Chuck.

But there is a real man named Charles Shaw. He has almost nothing to do with how the bottle with his name on it became so popular.

HIS story is a tale of love and loss. Boom and bust. A pioneer ahead of his time. And then mistakes, unintended consequences and a surprising rebirth.

Stay with us.

ACT I

DB: The first time I heard of Charles Shaw wine was in the early 2000s. I was in college. And it was starting to make news as this great underdog story. This ultra cheap wine I could actually afford was apparently as good as the expensive guys. Even NPR was reporting on it.

NPR CLIP: Some consumers still equate quality with price. That was was not the case in the 28th Annual Eastern Wine Competition. With 2,300 wines in competition, judges awarded a prestigious double gold medal to a $1.99 bottle of California wine, the 2002 Charles Shaw Shiraz.

DB: It would happen again. Its 2005 Chardonnay won top prize at the Cal Expo competition. And then other top awards in Orange County. And so like a lot of young college grads in the 2000s, I started drinking it.

There’ve been a lot of cheap wines over the years, but there was something different about Two Buck Chuck. It became a part of our lives.

KYLE KERCHAERT: In college, Two Buck Chuck was everywhere. I would see the cases of wine replace kegs at parties.

BRYAN YOUNG: I was throwing a party, so we were like, ‘hey, wouldn’t it be great to save money and also have this quirky thing, we’ll just get all this really cheap wine and when people walk in the door, we’ll hand them a bottle of Two Buck Chuck that they just drink straight from the bottle.’

STEPHANIE ASYMKOS: I was newly single, I was living alone for the first time in my life, and I would go to Trader Joe’s, grab frozen dinners, then I’d grab my wine and go home and unwind and I just like to feel that the Two Buck Chuck really elevated the whole experience.

DB: The bottle looks respectable. It even has a cork. The label is downright classy. There’s a little picture of a gazebo on the front and a nice serif font.

After college, my friends and I would serve it at parties and we’d simulate a fancier life than we could actually afford.

But to be honest, at that price, I never thought to question if Charles Shaw is a real person. It’s so generic sounding I just figured someone made it up to make the wine look more legitimate.

But it turns out…

CS: My name is Charles Shaw and I go by Chuck. Almost everyone calls me Chuck. So I always say I’m Chuck Shaw.

DB: This is that wine expert you heard at the top of the show. And as you’ll learn, that is his name and his bottle, but he didn’t make this wine.

[CHUCK HUMMING]

These days, the real Chuck Shaw lives alone in a high rise apartment building in Chicago.

He works overnights on databases at the Chicago Board of Trade.

He’s 74 and he spends his spare time fishing and out on the water. His decor could be described as porch furniture.

CS: I live kind of in a Bohemian thing. I’ve got a – I’ve got a stand up paddleboard is my thing. I’ve got a kayak and you know I’m a sea kayaking guy and I’m a fly fisherman, I’ve got – I’m going fly fishing this week.

DB: But many years ago – long before Two Buck Chuck came into anyone’s consciousness – Chuck Shaw was a winemaker, and he and his wife, Lucy, founded the original Charles Shaw wine label – in the Napa Valley, back in the late ’70s. Few people know the details about this. And it’s a story that Chuck holds close to his heart, even today…

CS: I did feel the whole time I was in Napa Valley that I was really alive. And I haven’t been that way since.

DB: He still has a bunch of nostalgic photos from his winemaking days…

CS: “his is the winery and you can see we had – you know, this is a pretty serious operation and these are 50 acres here...This is all Chardonnay over here. This is Gamay, all this. And this was – this was all Chardonnay, we made that Chardonnay, we made this all sauvignon blanc…

DB: On a shelf, there’s an empty bottle from a 1987 Pinot Noir. There are also framed labels lining his apartment walls: one is a 1988 Gamay Beaujolais Nouveau decorated with fall leaves on the label.

You might be confused if you’ve never heard about the real Chuck Shaw before, but stick with me.

The thing you need to remember about Charles Shaw is that the wine for sale today at Trader Joes — the wine in bottles that look almost identical to the labels on his wall — is not his wine. It’s not his company. But it is trading on his legacy.

DB: So, you’re basically out of the business around ’92 is that right?

CS:Yes, exactly.

DB: And then you have nothing to do with the Charles Shaw brand after that?

CS: Absolutely nothing.

DB: So how did we get here? And who exactly is Charles Shaw?

CS: I was born in Flint, Michigan.

DB: His parents worked at General Motors. After high school, he left for four years at West Point, then the Air Force, where he became an officer, working in what he calls “space matters.” He’d travel around the country negotiating contracts for the Air Force.

He was living in Manhattan Beach in California, where his roommate introduces him to a young woman named Lucy.

They fall in love, quickly married, and had their first child at an air force base. And then came another.

CS: And so I took my family – I had two children at the time – and my wife and we moved to Mountain View, California in the Palo Alto area and lived in the middle of an apricot orchard and went to the Stanford Business School but that’s where I got mixed up in the wine business.

DB: And were you both into wine at this point? is that something you bonded over?

CS: No my my wife Lucy, she never imbibed. She never – she didn’t believe in drinking, didn’t think it was for her and she never has.

DB: And this is long before Californian wine had any reputation right?

CS: It was starting. You know what I mean? It was just starting.

DB: A lot of things were happening in garages near Stanford back then. Some people were starting tech companies. Others were making wine. And they wanted the Stanford students’ help.

So this is where he first gets the wine bug. He graduates from business school in ’71. The family moves to Houston, but he just can’t stop thinking about wine.

Between shifts at his day job at Bank of the Southwest, he’d sneak away here and there to call a distributor in Texas or Louisiana. Then one day, the bank offered him a job in Paris.

CS: I remember the first weekend, I took my mother in law to Bordeaux to see all the – see all the chateaus, I was so excited to see them. We had a little Peugeot and you know took my two children, my wife and we drove down, spent a weekend or a long weekend in Beaujolais and I ended up drinking a lot a Beaujolais for the rest the time I was in Paris.

DB: Beaujolais is good everyday wine. Burgundy is the good stuff for special occasions. At least that’s how Chuck says it works in France.

So basically, Paris brought his wine obsession to new depths…

He’s really taking to French wine culture, and is falling in love with Beaujolais. And he never forgets about those wine pioneers he met at Stanford. But to join them would take some serious capital.

CS: My wife was an heiress to a certain extent. Her family were wealthy rice farmers and she – her grandfather was a very powerful, you know, land owner in southern Texas.

DB: A rice tycoon.

CS: Yeah he was, he was and some of them would have something like 40,000 acres of rice farms.

DB: While they’re in Paris, Lucy inherits something like $300,000. That’s like $1.5 million in today’s money.

Now he has the love of French wine, and they have some cash. They move from Paris to the Napa Valley, and he plots to build a house and plant a vineyard.

But Napa in the ’70s wasn’t like the well-trodden, tourist-friendly wine country it is today. There were more cattle than wineries, almost no hotels. There wasn’t much going on.

DB: Was your wife on board with this plan?

CS: Well I thought so but we moved all the way there and when we got there she – after about a month or two, she said she couldn’t live in Napa Valley, that it was just too much of a shock for her, coming from Paris to go to Napa Valley. And our property was on top of Howell Mountain overlooking Lake Hennessey. You know, geez, like paradise up there. But there were eagles up there, there were rattlesnakes out there. So it was really a shock that she didn’t want to do that.

DB: Lucy was restless and unhappy, isolated in wine country without even the comfort of a good glass of red. So Chuck shelves his plans. But a few years later, his dream of opening a winery is about to come true… he and Lucy find the perfect 35 acres in California.

CS: So we decided to buy it. It was three hundred and some thousand dollars.

DB: That was a lot of money then.

CS: Yeah that was a lot of money but it was planted. In other words it was brand new vineyard. So in terms of planted vineyard, I think we paid like six or seven – seven or eight thousand dollars an acre. Now that Vineyard today is probably about 300 to 500,000 an acre.

DB: Wow.

CS: So you could just see what it was like. Geez.

DB: He had the dream; his wife’s family had the cash. It was an all or nothing gamble.

Lucy’s relatives chipped in $60,000. Lucy put in 25 grand of her own money. The rest he got from loans and cashing in on stock options from a previous job.

All he had to do now was crack open a book on French winemaking a friend had given him, and start growing those Beaujolais grapes he loves.

And he really took to it ! quickly selling early batches to other wineries. Then great reviews roll in, and soon enough, he decides it’s time to put his name on the winery.

Then, Lucy puts in another hundred grand of her money. His dream of bringing French wine culture to America is within sight.

CS: Well, you see, this is where I think that I failed. Ok? This is where I think that the failure and where my problems really fundamentally come from.

DB: Coming up, those problems. There were a lot of them.

ACT II

DB: Ok, we’re back.

Charles Shaw is finally realizing his dream in California. He has a winery. He’s figured out how to make those French wines he enjoyed in Paris. And pretty soon he is selling the stuff!

As the 1980s roll around, Chuck is on his way to some very high highs… and some very low lows.

It was almost….like an opera.

[YES, GIORGIO CLIP]

This is a clip from the movie Yes, Giorgio with Luciano Pavarotti. It’s not exactly the highest point of Pavarotti’s career. It’s not fondly remembered, if it’s remembered at all. But it was a major production by MGM studios…and it was filmed on Chuck’s vineyard.

CS: MGM spent about three weeks there and they built a tennis court in the middle of our Gamay vineyard for the film with that gazebo. And that’s where the packaging came with the gazebo was from the film with Pavarotti.

DB: I had no idea this is why that gazebo was always on the labels of Two Buck Chuck…but this is where it comes from – even though, again, Two Buck Chuck is NOT Chuck Shaw’s wine…don’t worry, we’ll get there.

CS: I ended up liking opera. To this day it has been a great enjoyment to me and prior to that I didn’t even know what one was, you know?

DB: Opera and fine wine go well together. Never mind that Pavarotti was Italian and Chuck was making french wine! These details didn’t matter – Chuck’s plan to bring great everyday French wines to America was starting to work.

His first vintage — 1979 — sold really well. It was Gamay, a kind of Beaujolais. Really good wine, but not too fancy. The kind you might drink on a Wednesday. It might sell for ten or fifteen bucks today.

CS: It is so fruity, when you sit down at the table and the wine glass is poured out, you can smell the aroma just sitting at your table. It’s incredibly beautiful Garnet color, it’s famous for its Garnet colour, which is blue side of red and it’s such a beautiful thing in the glass and it’s so aromatic.

DB: Meanwhile, Lucy still didn’t drink. And this made for some interesting moments in the Napa Valley social scene.

CS: When we had dinner parties, she would put up a sign on the dining room door “no wine talk” and so. (laughs)

DB: How did that go over?

CS: Well you know to her credit, maybe it broadened some of these folks, including myself, because we were so immersed in the business you know what I mean? It was just business, business, business. But perhaps she didn’t you know, she didn’t love it like somebody who was involved in the production and you know in my case making wine and it was such a serious thing, you know. my goodness it was so competitive and you know it’s a competitive business.

DB: That competition demanded a winning strategy, Or… some bets that really paid off. For Chuck, his whole bet here was that he’d make a great everyday wine like the French drank: Gamay — that kind of Beaujolais. And he figured he’d have that corner of the market to himself.

CS: I screwed up I think in strategy because several producers in Napa Valley produced Cabernet Sauvignon. And I considered that competition so if I would do Burgundy wines like Gamay, I wouldn’t have to compete with the guys that were Cabernet, Cabernet, Cabernet and I could niche this thing, plus that’s the popular wine style in Europe. You know so I could be selling to the masses while these guys selling to the fancy trade.

DB: It made sense in theory. But here’s the thing: Americans didn’t know a lot about wine back then. Many thought it was elitist – all of it.

So because there were so many wineries pushing cabernet, Americans were like: oh! That must be what we should drink. Meanwhile, Chuck was just about the only guy selling Gamay. At first, his distributor Wilson Daniels was excited, but then…

CS: It didn’t catch on.

DB: Even though the wine was genuinely GREAT!

CS: We won gold medals in every tasting we were in. And we, I did three White House state dinners with that Gamay. We were put into the Mâcon Fair in France, the Burgundy Fair surreptitiously. So that’s how successful that wine was in terms of amazing quality.

DB: But people weren’t buying it. Chuck had a Gamay glut, and had to find a place to dump it.

CS: I ended up going to Trader Joe, Joe Coulombe down in Pasadena. He’s a Stanford guy. So I go down there, ‘hey Joe you know let’s do a deal.’ And I sold it at a price. He had a truckload sale. You know what I mean?

DB: I know you’re probably thinking this is the beginning of Two Buck Chuck at Trader Joe’s. But it’s not.

It wasn’t sold as Two Buck Chuck then…it is just a coincidence that Chuck Shaw sold his much more valuable wine to Trader Joes, for about $2 a bottle.

See, Napa Valley winemakers back then would often dump their excess product for cheap at Trader Joe’s, but they didn’t want to be associated with bargain wines, so Joe would just sell it quietly — never advertising the labels.

CS: …that way you protect your brand. And so all the Napa wineries if you had inventory problems you would just lay it off to Trader Joe.

DB: Anyway, he learned from that and started diversifying to Chardonnay and Pinot Noir.

And he bounced back — in a big way. He released wines with American Airlines. He had grand openings at fancy hotels. He continued to travel the world with his wine.

DB: And so it sounds like in the mid ’80s things are great.

CS: Yeah.

DB: So what happened?

CS: Well in the mid 80s was what could – what could go wrong? Right. I’ve got five children. It was kind of a – man, it was an intense period of time in the business, meaning people were coming into Napa Valley, they were building hotels and fancy restaurants and you know what I mean? It was just – God it was like a boom you know? And here I was in the midst of it and I was one of, say 18 principal producers. It was just wonderful, so the thing is what could go wrong right?

DB: A lot of things were about to go wrong. This lifestyle and the winery’s growth was all fueled by debt. He used that debt to double production but there wasn’t enough demand. Then, he had an idea to put it in fancy wine barrels, but the supplier coated them in paraffin…

CS: So the wine was polluted by this petroleum flavor.

DB: …and he lost 10,000 cases.

CS: I took one taste of that wine and almost broke my heart.

DB: That wasn’t all. A bug called root louse destroys his main vineyard. This starts to worry his wife and her family who are financing a lot of this. And then to top it off, a bank calls and wants some of its money back.

DB: Did you feel like this was the beginning of the end? I mean what was going through your head?

CS: Well I tell you it makes you uncomfortable to lose that kind of money, you know it’s a stressful – and I think maybe my spouse was saying ‘what a dumb shit. ‘You know what I mean? Because I wasn’t – I don’t think I was attending – enough to her.

And what happened was, I woke up one day on – it was New Year’s Day. And I went out and she turned to me and she was sitting there in bed and said ‘I want a divorce.’

DB: We’ll be right back.

ACT III

DB: Ok, we’re back, and Charles Shaw has just gotten some of the worst news of his life.

CS: It just completely, completely just – I just dropped – I just dropped down you know crying.

DB: And was that totally out of the blue for you? Had you not realized?

CS: Yes. Completely out of the blue. And I was just crushed. And I was desperately in love with my wife, she was a – she’s quite an attractive woman and quite a character.

DB: The Charles Shaw winery might have survived the bad barrels and the sick vines and the overproduction and the banks asking for some money back. It might have survived all that, if Lucy’s family had sunk more money into the whole venture. But they were done.

CS: And so I went to get the capital. And my wife would not allow that because she had decided to divorce me and I wasn’t aware of that. And so when that morning I woke up, she said she wanted a divorce, probably she just lost confidence in me.

DB: If you think that sounds harsh, just remember – without Lucy’s investment, Chuck would never have had any of it. She says in total, she thinks she invested something like $450,000. That’s more than a million in today’s money.

And we asked Lucy about all this. And she said there were other reasons the marriage fell apart.

But with the marriage failing, the business partnership was too.

Someone suggested declaring the whole thing unmanageable so the state would come in and take over the winery.

CS: I was so disappointed about the failing marriage, it just broke my heart.

DB: What happened was Lucy wanted to take control of the winery. If the divorce went through, she and her mother owned enough of it that they could vote to remove Chuck as general partner.

CS: She removed me. It was right in the middle of harvest, 1991 I think it was. She called a meeting and removed me as a general and then in the agreement with Kobrand, they had 30 days to accept a new general partner if Charles Shaw were removed.

DB: But, here’s the twist…

CS: They did not accept Mrs. Shaw as a general partner. And so the distribution of the winery completely collapsed within 30 days of me being removed as a general partner. And so she declared bankruptcy.

DB: They submitted a plan to reorganize, but the court rejected it. A trustee took control.

In its final year, the real Charles Shaw winery had produced 65,000 barrels, and then it was all over.

CS: The winery thing just was a secondary thing to me. I just couldn’t get over the – I was on the vestry of my church for all those years. You know what I mean? And I coached the football – the kids football in town. And I just didn’t feel like much of an example. You know? And I just – it just crushed me. I’m from the Midwest. I’m a religious man. And it just damn near, I just damn near died.

DB: After this huge loss, something else is taken from Chuck – his name.

The trustee for the winery now owned the Charles Shaw brand and label design.

A couple of marketing guys from the famous Robert Mondavi winery realize, ‘hey, that brand is worth something’.

So they scoop it up, and immediately sell it to Fred Franzia, a savvy businessman who mass produces wine at his Bronco Wine Company – remember that name.

After the collapse of the winery, he heads east and eventually ends up in Chicago where he tries to build a new life. He had no idea his name and label had been sold.

But back in California his brand name and that label design with the gazebo are sitting on a shelf at the Bronco Wine Company.

Now, Bronco is not known for fine wine. It produces on a mass scale in huge industrial tanks.

Its grapes are grown in the far less prestigious Central Valley. If they’re aged at all, it’s on the highway to the plant near the Napa airport so it can say it’s from that region.

Some call it a “zip code winery.”

Fred Franzia is savvy – he built Bronco by buying up names and labels from bankrupt wineries.

He bought the Charles Shaw brand name for $27,000 and just held onto it.

That is, until 2002.

It’s after 9/11. There’s a recession, which led to a big wine surplus, and that’s when Fred looks at all the labels he’d bought up over the years, but never used, and pulls one off the shelf.

You guessed it: Charles Shaw.

And in an ironic repeat of history, Fred takes it down to none other than Trader Joe’s to go back back on the shelf, with a $2 label.

And this is the moment that the Two Buck Chuck we know today, is born.

DB: How did you first find out about that?

CS: I think Joe sent me a note. Joe Coulombe.

DB: You know, the founder of Trader Joe’s.

DB: Was this a total surprise when this showed up at Trader Joe’s in 2002?

CS: Yeah, complete surprise.

DB: What was your first reaction?

CS: I was all upset!

DB: All of a sudden other wine folks from Napa start noticing this old prestigious brand is being sold for a couple of bucks.

CS: I just thought it was terrible because my friends in Napa Valley blame me for this low priced, former Napa brand coming in and making them – I think some of them felt it was making them look bad.

DB: This is the kind of elite wine world Charles Shaw belonged to – a pretty far cry from the Bronco world of bargain bottles!

CS: You know and here I was trying to tell my old Napa Valley vintner guys that it wasn’t me that did it.

DB: It’s been 16 years since then…and Two Buck Chuck’s still going strong. And over the years, Chuck Shaw has come to terms with it all…

CS: Well, today my reaction is exactly the opposite. I am just thrilled.

DB: He pulls out the May 2017 Trader Joe’s newsletter celebrating the 15th anniversary of the wine. A billion bottles.

Bronco has been able to keep costs down by running things very differently than the real Chuck Shaw. Bulk production, cheap corks, cheep bottling, cheap shipping, cheap real estate costs. Everything is pretty cheap. And that’s the point. The masses don’t always need fancy French wines as Chuck thought.

CS: So what my point is now is wait a minute. If it weren’t for these guys, we would be nothing. No one would even know who we are and what we did.

I failed. Yeah sure I failed. But I went to talk to Stanford last year, and the kids all come up to me and said ‘Oh God it’s great. You know hell all the dorms love it. You know all of the fraternities and sororities love it’ so can’t be all bad. So I think what the hell you know?

DB: Have you seen a penny from those billion bottles?

CS: No. No. Not a penny.

DB: He’s not the first person in business to lose control of his name. He’s not the first to watch someone else make millions off something he built. But it still stinks, right?

DB: Do you ever think you know if you had had some rights to that name like what what would they have done for your life?

CS: Well make it different, wouldn’t it?

And here is the – a state dinner for the prime minister of the Islamic Republic of Pakistan…

DB: After he had shown us pictures of state dinners, an unopened 1988 Charles Shaw Sauvignon Blanc, and old magazine articles about his winery, we pull out that 2014 Charles Shaw Merlot from Trader Joe’s. Before he tasted it, he had one request.

CS: Do you mind if I sign this?

DB: He signs right on the label next to that gazebo from the Pavarotti film.

CS: Whew!

DB: After his divorce, Charles F. Shaw tried to spoil his kids to curry their favor. He found new jobs and new cities. He even tried to start a winery in Michigan. But in the end, Two Buck Chuck at Trader Joe’s has become his legacy, too.

CS: If somebody hears my name, like I’ll be in a restaurant and they’ll look at my credit card. And typically it will be a joke. ‘Oh you must be Two Buck Chuck.’ You know what I mean? That’s what they always say.

DB: And then what do you say?

CS: I say ‘Well yeah I am the founder of that winery. I have nothing to do with it now. But interestingly enough 40 years ago I did.’

DB: Next time you see some 2 buck chuck on the shelf…spare a thought for the real Chuck Shaw.

That’s not the end of today’s episode though – now we’re going to dive into something we call Product Misplacement.

This is the part of this show where we get to hear from YOU, about how brands have infiltrated YOUR life.

We want to know where a major brand was during a specific moment of your life.

The reason I started this show is because I think it’s pretty hard to avoid contact with brands in most of what we do.

They’re attached to so much of our lives,  they become the intertwined with significant moments and memories… maybe you cringe every time you see a Windex bottle? Or Target’s parking lot sends you back to a certain argument…or if you’re like me…you get a lump in your throat when you see an Olive Garden.

Our first Product Misplacement story comes to us from Mindy Eskow, in San Francisco.

MINDY ESKOW: I had a very exhilarating love life in middle school. AOL Messenger was kind of THE place to be, where you can message your crush with a conversation of: ‘Hey!’ ‘Hey!’ ‘What’s up?’ “Nothing much, you?’ ‘Nothing much.’

My actual middle school crush only Yahoo Messenger. I got a Yahoo email address just so we could instance message. Our conversations were so much more than the classic ‘Hey!’ ‘Hey!’ ‘What’s up?’ conversations I was so used to having at age 12 and I thought that meant we were definitely going to date.

He mentioned that his favorite breakfast item was a type of Quaker oatmeal called Dinosaur Eggs. I wasn’t really a breakfast person but I immediately feigned interest anyways. Dinosaur Eggs oatmeal is a microwavable oatmeal that comes with these little eggs of sugar that hatch into dinosaurs when you microwave it. So like any independent middle schooler, I made it my thing to love Dinosaur Eggs oatmeal so it would later become our thing.

My mom wasn’t super keen on sugary breakfasts, but I think the word “oatmeal” kind of tricked her into buying it for me. It later became a ritual to go to school, be too shy to talk to Trent in person, and then go home and message him about the Dinosaur Eggs oatmeal we ate that day. He even gave me a box of it wrapped with a bow for my birthday one year, which remains one of the most romantic gifts I have ever received.

And then one day, Trent started dating one of my best friends, and my romantic interest in him disintegrated faster than a dinosaur egg in oatmeal. If the year I mostly ate Dinosaur Eggs oatmeal taught me anything, it was about how quickly things in life change, whether it be an egg changing into a dinosaur, or how quickly I could change from loving Dinosaur Eggs oatmeal to never wanting to eat it again.

DB: Love and loss. Thanks Mindy!

Tell us your product placement story! You can record it straight into your phone and then email householdname@businessinsider.com, OR just call 731-3-BRANDS and leave us a message with your name and contact info. That’s 731-3-BRANDS.

CREDITS

DB: To hear Household Name without ads AND to get access to the first SIX episodes…sign up for Stitcher Premium at stitcherpremium.com/householdname and use promo code: HOUSEHOLD for your first month free. And we want to be a household name in the podcast world, so rate and review us to help us get into every home in America, it really helps. 

This episode was produced and reported by me, Dan Bobkoff, who wants you to know that he is not too pleased with new Charles Shaw labels that no longer feature a gazebo. Anna Mazarakis also produced this episode, she loves herself some two buck Pinot Grigio—no judgement there. Our senior producer is Clare Rawlinson, who grew up in Australia, where something called “Passion Pop” played the role of Two Buck Chuck. She was a passionate, Passion Popper.

Mixing, sound design and original theme music by Casey Holford and John DeLore—I wager they’re more craft beer kinda guys. Our editor is Peter Clowney, and he remains very confused by the pricing of Two Buck Chuck. 

Our executive producers at Stitcher are Chris Bannon, Laura Mayer and Jenny Radelet. Special thanks to Natalie O’Neill, Arabella Breck, Stephanie Asymkos, and Kyle Kirkhart. 

Household Name is a production of Insider Audio.

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Top Stories

To Top