Profiles of Success

Fred Franzia and Two-Buck Chuck

The Taste of Success

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Two adjectives often used to describe California winemaker Fred Franzia are “pugnacious” and “shrewd.” Franzia, a nephew of Ernest Gallo, is co-owner, along with a brother and a cousin, of Bronco Wine Company. Bronco makes Charles Shaw Wine and some two dozen other brands and labels, but it is “Two-Buck Chuck” that really put Bronco on the map.

Fred Franzia Two-Buck Chuck wine workingFranzia has made heretical statements such as “no wine is worth more than $10” and prides himself on being able to sell a very acceptable wine for $1.99 through an exclusive retail distributor, Trader Joe’s.

Bronco Wines is able to produce and sell Charles Shaw for under $2 not because it is “cheap,” but because it is “inexpensively made.” Franzia has streamlined modern winemaking techniques and uses economies of scale that enable him to run an operation unlike anything else in the California wine industry. When Charles Shaw became a huge success in 2002, Franzia began expanding, buying and planting new vineyards until he controlled 35,000 acres. He also buys up bulk grapes from other vintners for a cheap price when there are surpluses. Volume manufacturing, careful management of costs, no debt, and control of everything from supply to bottling to distribution have brought the price down to an unprecedented level for a wine of Charles Shaw’s quality.

Bronco’s headquarters is in Ceres, near Modesto, in the Central Valley. This is where fermentation of the grapes occurs. But don’t envision a quaint little vineyard with oak barrels in dim cellars. This facility has, according to Ron Russell of the SF Weekly, “all the charm of an oil refinery,” with storage tanks that can hold 80 million gallons of grape juice and wine. When it’s ready, the wine is brought by fleets of tanker trucks to Bronco’s large Napa Valley facility that does not grow, crush or ferment grapes. It’s only a high-speed bottling plant where millions of cases of wine are bottled each year.

Other vintners, especially those in the prestigious Napa Valley where grape-growing land sells for a premium, resent his using the Napa name on wine that is not of Napa origin. A court battle raged for years that was only recently resolved regarding Bronco’s labels Rutherford Vintners, Napa Creek and Napa Ridge. A 1986 federal statute requires place-named wines to have at least 75 percent of its grapes grown in that place, but exempts labels that were so-named before 1986, as were these acquisitions of Bronco. However, a California law passed in 2000 prohibits this exception. Franzia fought this newer law for years through the courts, wanting to continue using less expensive Central Valley grapes in these labels. In April 2006, he lost his case and now uses the requisite 75 percent of Napa-grown grapes in these brands.

This was not first time he’d had a problem with regulatory and labeling issues. (In 1993, Franzia pleaded guilty to intentionally mislabeling 5,000 tons of grapes, in $5 million worth of wine.) Bronco Wines paid a $2.5 million fine and Franzia personally paid $500,000, had to step down as CEO, and had to relinquish his seat on the board of directors for five years.

Franzia’s office is in a spartan portable shed at Ceres. The 62-year-old man usually works seven 16-hour days, claiming “work is my pleasure.” If he ever does decide to retire, a Franzia successor seems fairly certain. The three Bronco owners have 13 children among them, nine of whom are already in the business.

Suzanne Ridgway is a freelance writer and regular columnist for Working World and Working Nurse magazines. Suzanne also writes grant proposals for nonprofit organizations.

This article is from WorkingWorld.com