Friday, May 23, 2008

Three-Buck Chuck

I know it's heresy, but I really dislike Trader Joe's. One of Stella customers dispelled the rumor that one is coming to the new building on Granville and Broadway, and I'm not the least bit disappointed.

If I did like that place, or at least emulated its ways, Stella would have a different business model. Our lattes would cost a buck fifty, but there would be no need to spring for the fancy beans, the fancy machine, or all that costly barista training. We would offer bona fide, albeit low-quality versions of stuff that appeals to today's young sophisticates.

Of course, this business model works remarkably well for Trader Joe's. The little plaza it shares with CB2 is forever abuzz with Volkswagens and Subarus. CB2 must be ecstatic about the spillover business.

The business model works best of all, it seems, for three-buck Chuck, also known as Charles Shaw Shiraz, which retails there for $2.99. Apropos, did you know they call it two-buck Chuck in California? Some crazy shit, that.

As you walk into the store, you see boxes of the Chuck stacked high against a wall. You will also see those Jetta/Outback drivers loading up on the Chuck. The Outback people even have the foresight to get entire boxes. The Chuck is used for dinner, entertaining, bringing the requisite bottle of wine to a party, the works. Where once guests shot inquisitive looks at the pretty labels, wondering how much the bottle cost, today certainty rules. How lovely and strange, no? Well, it's not that lovely, and it's surely not strange. Moreover, the same will happen to coffee soon.

The other day I read a feature on CNN Money about Fred Franzia, or Mr. Three-Buck Chuck. He is not to be confused with Mr. Wine-in-a-Box. That's a cousin of his. Anyway, Mr. Three-Buck-Chuck is an extremely successful businessman who espouses a philosophy, and he'll explain it to anyone who'll listen, especially if it will end up in print. His claim is that only an idiot would pay more than $10 for a bottle of wine, and he wants to convert the world to that point of view. Of course, it's all a bunch of bullshit and he knows it. A sixty-dollar bottle can blow you away. Even a twenty-five dollar one can, if you are know how to pick'em.

The whole thing is just an act he puts on, a persona that he uses to market his product. Still, in the process he is, in fact, fighting pretentiousness. He sells a bona fide, although low quality, cab that is priced as low as it can go. Its popularity makes it impossible for anyone to charge ten bucks for a bottle of crappy wine.

Today you can find a variety of wines between $4 and $20 in your neighborhood liquor store. They all taste about the same - sour and, well, cheap. But, if you were to opt for Whole Foods instead, the stuff there is quite good. This is mostly because Whole Foods is Trader Joe's closest competitor, especially in the crunchy demographic. Surely, you can't very well sell swill for $10 if the other guy charges $2.99.

The neighborhood guys are catching up. The Korean dude underneath the Sheridan El is the biggest one in my hood, and he's improved his selection a lot in the last year or two. Once the wine market truly matures here in the United States, we will have carton wine on supermarket shelves. Check out exhibit A, from the Wine90 blog.



Note the price. Cheap, yes? No one brings that stuff to parties, because they can pick up something nice for 8 euros. We can't, because most of us still can't tell the difference. We are getting there, though.

Now, the coffee market is a different story. Here in the Chicago area, there are only a few shops that control the quality of their espresso. There are hundreds that don't, including Starbucks, but they all charge the same for a latte, and get away with it. Dunkin Donuts is the one trying to undersell everyone, but apparently their war is not a holy one - they only knock off about 10%.

One day, someone will force most of these places to lower prices or raise quality. Of course, we here at Stella Espresso are not afraid, because we - brace for a shameless plug right here - we chose to start with quality. Actually, the Three-Buck-Chuck of latte would do us a favor - eliminate most of the competition in one fell swoop. Bring it on.

8 comments:

Anonymous said...

The Three Buck Chuck model is everywhere, and it works well in many places. Volkswagens are Three Buck Chuck cars. Condos in Lincoln Park are Three Buck Chuck brownstones. Any paper cup in any coffee shop is a Three Buck Chuck substitute to a real coffee drinking experience. The Three Buck Chuck model is "OK for cheap" and is not to be confused with "crap for cheap" or "crap for a lot".

Pavel Yusim said...

"Ok for cheap" is a good way to put it, I think. Once 'ok for cheap' becomes available, 'crap for a lot' starts going away. 'Crap for cheap' survives regardless.

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