Three NW grocery chains target inexpensive wines

The Northwest's three largest grocery-store chains are jumping on the "Chuck"-wagon to provide customers with inexpensive wines.

Safeway, Fred Meyer and Albertson's are working on ways to cash in on the market created last year when Trader Joe's markets had customers lining up for bottles of California-produced Charles Shaw wine, which sold for $1.99 in some areas, but $2.99 in Washington stores. (The additional $1 here was to cover the state's higher taxes on alcoholic beverages, a store manager says.)

Across the country, Trader Joe's in less than nine months sold more than 2 million cases of the merlot that became known unofficially as "Two-Buck Chuck."

Safeway, as part of a distribution deal with California bulk-wine giant Golden State Vintners, planned to unveil its Pacific Peak label in an ad campaign in some parts of the state. The ads were scheduled to appear in Oregon and the Vancouver area of Southwest Washington, said Tom Leach, the company's director of sales and marketing in the Pacific Northwest.

The wine will sell for $2.99 per bottle and $32.99 per case.

The wine probably won't be available in other areas of Washington until May or June, according to Bill Diehl, field merchandiser for Safeway's Puget Sound division.

"We're not going to do anything with this brand for a while," he said, explaining that Golden State Vintners has yet to provide promotional information to the Washington stores; distribution arrangements still need to be worked out, too.

Boise-based Albertson's got into the game the middle of last year. Its Northwest stores carried Pine Brook merlot at $2.99 per bottle, said Dennis Schwarz, the supermarket chain's Portland-based director of marketing.

"There may be some still out there, but it sold through pretty well," he said. Whether more Pine Brook or another low-cost label will be available at Albertson's stores is uncertain, he added.

Schwarz said the chain is looking at a number of offers from California bulk-wine makers to supply stores with product, but it would rather see Oregon and Washington wineries step up to the plate.

"I'll tell you quite honestly, we really want to support the wines from Oregon and Washington," Schwarz said.

But at $2 or $3 a bottle retail, it's unlikely such wines could be made with Washington grapes, according to Washington Wine Commission spokeswoman Stacie Jacob.

"Washington cannot even afford to produce a wine at that price point," Jacob said of the $2.99 Pacific Peak. "Our focus is on premium wine grapes and with the varieties we're producing, we don't even fit in that category of wine."

"The issue is (California's) oversupply and ways to get rid of it," Jacob said.

"I really don't think it will last once the hype goes away and once people start drinking the wine. They may drink it once, but the low profit margin requires getting repeat customers."

Fred Meyer stores also are working to provide inexpensive wines, according to Rob Boley, the Portland-based company's assistant vice-president for public relations.

"We definitely have a concerted campaign under way to locate wines in the $2 to $5 range," Boley was quoted recently by The Associated Press in Portland. "There's a real excess supply of good wine out there, and we are doing everything we can to find them and bring them to our customers."