Fred Franzia Warms at 30th Anniversary of Bronco Wine Company

Fred Franzia Warms at 30th Anniversary of Bronco Wine Company
By Paul Franson

Notoriously reporter-shy Fred Franzia changed his spots recently, inviting a number of writers to his Bronco Wine Company's 30th anniversary celebration. He didn't disappoint those looking for good quotes.
Referring to retailers who charge too much for wine as "greedy bastards," and challenging restaurants to sell wines for $10, the irrepressible Franzia mostly touted his winery's accomplishments to refute those in the wine business that belittle his role. For example: Bronco was chosen the winery of the year for the second time at the Unified Wine and Grape Symposium to groans of other attendees in January.
This year, the winery's sales will be about $300 million on about 10 million cases of its own brands. It crushes 300,000 tons annually. The rest is sold to other wineries.
It exported four million gallons of bulk wine and 200,000 cases of bottled wine in 2003, mostly to the UK and Germany, but overall to 60 countries. "We just shipped a container to India," Franzia announced proudly.
The wine company claimed over 100 million gallons of temperature-controlled stainless steel storage and 80,000 oak barrels.
Bronco's wines won 623 medals at competitions last year, though even Franzia chuckles, "No one ever asks how many times you enter."
Two Buck Chuck Brings Fame
The pugnacious Franzia, of course, is best known as the father of "Two Buck Chuck," the $1.99 Charles Shaw wine sold by Trader Joe's discount gourmet stores.
Now approaching 10 million cases in total sales and running five million per year, the wines created a revolution among wine lovers. Decent, cork-finished dry varietal wines in standard 750-ml bottles, they quickly gained a cult following among the "underpaid and overeducated" shoppers Trader Joe courts.
The wines quickly became best sellers, taking an astonishing share of the total California grocery wine market, and if they didn't appear to significantly expand the population of wine drinkers, they attracted many current wine lovers to enjoy wine with dinner more often--or more generously.
Before Charles Shaw arrived, Franzia was perhaps most recently best known for building a huge bottling plant in southern Napa County where he could bottle Central Valley (and some Napa) wines with labels like Napa Ridge, Rutherford Vintners and others that suggest Napa origins.
Infuriating the producers of expensive Napa wines who called the technique at least misleading, he inspired the state legislature to ban the practice, a vote soon overturned by the courts and now under appeal.
That wasn't Franzia's first brush with controversy, either. He had earlier paid substantial fines for pawning off inferior wine under varietal names. He has always been considered a clever businessman.
Franzia marked the 30th anniversary at his Mountaintop Vineyard east of the tiny community of Herald among 6,000 acres of attractive rolling vineyards at 200 feet above sea level, higher than most northern California vineyards. It lies in the eastern Lodi appellation.
Choosing the site rather than a more 'convenient' one like his large Napa facility, he picked the location to remind writers that he and his family own 30,000 acres of California vineyards in 11 counties, the largest ownership of vines in the state. "It's important for you to see grapes growing like this," he told attendees.
He also reminded people that all of his land is in foothills, not the Central Valley floor, and his vineyard near Tehachapi lies at 800 feet above tdlemen to undercut rivals.
The cousins began as négociants with the super value wines of their day, JFJ Bronco and CC Vineyards, but they also started developing vineyards, another secret to their success. "We are growers," said Franzia, noting his company buys less than 10 percent of the wines it sells under its own brands, another of the many keys to its ability to sell good wine at low prices.
He claimed the group sells 35 to 45 percent of its own production as bulk wine.
The company has four wine production facilities, the original plant in Ceres, where most of the fermentation occurs, the impressive new bottling plant in Napa where 70 percent of its case goods are bottled, the old Petri plant in Escalon bought last year from Constellation, and leased facilities in Sonoma County used for the Hacienda brand he acquired there. The company also works with 10 additional wine production facilities.
The Napa plant started with one state-of-the-art bottling line, but with the success of Charles Shaw and other brands, has added another. The facility is no bare-bones industrial building, but comparable in design to other facilities in Napa County. It also serves as an aging facility for barrels of wine, with a sophisticated natural cooling system taking advantage of its location near San Pablo Bay.
Many Brands, Many Styles
Bronco makes wines under a vast number of labels. Many, like Charles Shaw, were acquired by Franzia from distressed companies. The brands include ForestVille Vineyard, Montpellier Vineyard, Hacienda Wine Cellars, Napa Ridge, Forest Glen, Estrella, Napa Ridge, Sea Ridge, Coastal Ridge, Silver Ridge and on-premise brands like Salmon Creek and Domaine Napa, plus, of course, Charles Shaw and a new super-value wine for independent grocers, Crane Lake.
Many wonder what the difference is between the wines, and reporters at the event joked that the two cooling towers for the nearby abandoned Rancho Seco nuclear plant will be his new tanks--one for red, one for white.
But Fred Franzia claimed a different winemaker for each wine in its price category. "They're all different," he asserted. He also disputed that the Charles Shaw varies. "No wine tastes the same every day," he claimed, dismissing reports by critics that they've found variations.
Franzia wonders why other wineries don't follow his lead and introduce lower-cost wines, and he said even wine patriarch (and relative) Ernest Gallo complained that he's selling wines too cheaply. "They're afraid consumers will get used to the prices," said Franzia.
Franzia is leading a virtual crusade for less expensive wines. Few restaurants feature his wines, and he fumes that they won't sell wines at low markups. "If they sold wine cheaper, everyone's food would taste better," he pointed out. "Until they do, America is never going to be a wine-drinking nation."
He doesn't add that he'd be a likely beneficiary if the restaurants more sold inexpensive wine.
Franzia challenges restaurants to sell decent wines at $10 per bottle, and has been seeking a major restaurant chain to partner with his company much as Trader Joe's did at retail. "The Charles Shaw project made Trader Joe's a destination retailer for wine; a restaurant chain should be able to do the same," he said
So far, however, Franzia has been unsuccessful in signing up a major restaurant chain for his wines, a process Gallo and some other producers have done well.
He also seems mystified that more groceries don't emulate Trader Joe's. "How can any major grocery chain not have a wine that competes with Two Buck Chuck?," he asked.
He said that Bronco's Sea Ridge brand, which is sold in Safeway for $4.50, sells for about the same at wholesale as Charles Shaw, so Safeway could sell the wine for $2 and still make a profit.
Chains have sold $2 wines, but when it was pointed out that other super-value wines didn't do well, Franzia asserted, "They weren't selling our wine!"
He seems especially incredulous that big box stores like Costco and WalMart don't sell super-value wines. "They're not in the game; their prices are way out of line," he said.
Fred Franzia has often complained about imports in the past, so it's interesting that he is now importing La Boca wine from Argentina, that is also sold at Trader Joe's.
In the past, he argued that imports undercut California wines in America. "Every time we give up market share to imports, we have to fight to get it back."
Now, he seems comfortable in importing wines that undercut other imports, but he also sees the weak dollar as a boost to our exports.
The Future of Charles Shaw and Its Cousins
Franzia asserted that little of the Charles Shaw wine was from surplus bulk. "There wasn't that much around," he said, dismissing the reports of vast surpluses. "There wasn't anywhere near as much as was reported."
He said the stories were affected by the inflated amount on the spot market, a small amount of total wine production.
He said that he can adequately supply the demand for the super value wine in today's environment, and has even introduced another version, Crane Lake, for stores other than Trader Joe's. He admits that sales to Trader Joe's are off a bit since last year, but believes that's because the stores loaded up inventory a bit too much last year due to the demand.
Most Charles Shaw wine is the four big varieties: Cabernet Sauvignon, Merlot, Chardonnay and Sauvignon Blanc, but Bronco has also tried some other varieties. It sold some 300,000 cases of Gamay Beaujolais in the fall, and is adding Syrah. He also has Viognier, but finds it is in little demand.
Interestingly, Franzia claimed to be California's largest producer of Pinot Grigio, the industry's hottest label, but it's in such demand from other companies that he only sells it in the Forest Glen line. "Others can buy it if they pay cash," he joked.
Looking to the future of his wine company, Fred Franzia worries that his generation lacks the leadership qualities of the Gallos and Mondavis of the last generation. However, there are 13 adult children between Bronco partners Fred, Joseph and John Franzia. Fred Franzia noted that nine of the 13 are working for the compnay.
If any of them have Fred Franzia's talent--and perhaps a bit more restraint--the future success seems assured. wbm
Paul Franson writes from St. Helena, California, about wine and business. Check out his websites: www.franson.com or www.napalife.com.