$1.99 wine shook up the wine industry

They say don't compete on price. It's a race to the bottom.

Fred Franzia didn't care. In the early 2000s, he launched a wine that sold for just $1.99 a bottle in California. Yes, in California — known for premium vineyards and expensive wine —you could walk out with a full 750ml bottle of wine for less than a bottle of water. It was cheaper than a Starbucks coffee. People were stunned. Was it a joke? Was it drinkable? Was it even legal? And yet, they bought it. Again and again. The wine was called Charles Shaw. But the world came to know it as Two Buck Chuck.

At $1.99 a bottle, Fred didn't just create an affordable wine—he changed the meaning of affordable. Wine had always carried a kind of pretentious price tag, something reserved for dinner parties, date nights, or special celebrations. Fred changed that. Suddenly, wine was for everyone. It was casual. It was normal. It was something you could drink with leftover pasta on a Wednesday. College students grabbed it by the case. Retirees on fixed incomes made it a staple. For many Americans, it was their first bottle of wine.

And despite the price, it didn't feel like a gimmick. That was the key. Fred made deliberate decisions to make sure the wine didn't come off as "cheap." One of the smartest moves? Natural corks. Most wines under ten bucks use plastic stoppers to cut costs. But Fred insisted on real cork. He wanted people to have the satisfaction of removing the cork. It matters. It sets the tone. It tells the customer: this is a real bottle of wine.

Fred also didn't waste money trying to market the wine in traditional ways. No commercials. No magazine ads. No influencers. Instead, he partnered exclusively with Trader Joe's. This move was genius. It allowed Fred to skip all the usual distributor layers and middleman markups. They shipped straight to Trader Joe's warehouses, then directly to shelves. That tight, streamlined supply chain helped keep costs low.

The wine itself was built for scale. Fred produced it on an industrial level. Massive stainless steel tanks replaced oak barrels. The bigger the batch, the lower the cost per bottle. Instead of buying grapes from Napa or Sonoma (famous but expensive regions), Fred partnered with the vast vineyards of California Valley, where land was cheaper and grapes cost a fraction.

Fred's company pioneered lightweight glass bottles. Lighter cases meant cheaper shipping – more cases could fit on a truck before hitting weight limits, and fuel costs per bottle went down. Fred opted for brown cardboard boxes instead of white ones to save pennies. It sounds trivial, but when you're moving tens of millions of bottles, pennies add up to millions.

And the result? A wine that sold. By 2013, over 800 million bottles of this wine had been sold. A $1.99 wine became one of the best-selling wine brands in the country. It ranked among the top 20 wine brands by volume in the U.S. People couldn't believe it. It was discussed in TV constantly. That gave this wine free publicity. People got curious and they bought it to try it out and then numbers went up which made the news again.

The impact went beyond just sales. People didn't just buy it because it was cheap—they bought it because it hit that rare sweet spot of price, quality, and familiarity. It became a staple. A meme. A conversation starter. A cultural reference. It was wine that didn't ask you to know anything about wine. It was wine without the snobbery.

Fred democratized wine in America. He proved that wine didn't have to be expensive to be good, opening the door for millions of people who might've otherwise avoided wine altogether. Fred was heavily criticized for cheapening the wine, but he didn't apologize for the low price. He leaned into it. He made it the story.

Fred's act is a masterclass in doing what you're not supposed to do—competing on price—and making it work anyway. Through obsessive cost control, smart distribution, and a feel for what people care about, Fred turned an obscure label into a household name. He didn't just disrupt the wine market. He changed it. Permanently. One $1.99 bottle at a time.