The head of ‘Two Buck Chuck’ owner Bronco Wine Co has warned the wine industry against focusing only on premiumisation for long-term growth.
Late last year, the privately-owned, California-based group appointed Dominic Engels as its CEO following the retirement of Daniel Leonard after 38 years with Bronco. Engels, whose career prior to his latest role included four years leading San Diego’s Stone Brewing craft brewer, was interviewed by the San Francisco Chronicle last week.
“Honestly, I draw a lot of analogues from the craft beer dynamics over the last eight or nine years,” Engels said of the wine industry in the interview. Despite figures showing that wine’s growth in the US is coming from the US$50-plus per-bottle end of the price ladder, Engels, who is overseeing a portfolio dominated by the Charles Shaw brand, was described in the article as being “undeterred”.
“We firmly believe that the value segment is very important for creating lifelong loyalists,” he told interviewer Esther Mobley, adding that the premiumisation trend completely ignores “the funnel of new 21-year-old consumers”.
While Engels conceded that Bronco is “probably over-indexed in value”, he expressed an interest in growing the company’s presence in the $15-to-$20 price bracket. Four months ago, Bronco upped its majority shareholding in Wine Hooligans in California to full ownership. The business operates predominantly at the $12-plus per-bottle level, according to the Chronicle.
Debuting exclusively through the Trader Joe’s multiple retailer in California in 2002, Charles Shaw earned the nickname Two Buck Chuck through its launch SRP of $1.99. The brand is currently priced at nearer $2.99.
