Franzia's good quality $1.99 brand credited for U.S. wine resurgence
Sometimes Fred Franzia sounds like Ralph Nader in vineyard boots.
Like when Franzia, the man behind Charles Shaw Wines, the brand so famously nicknamed Two-Buck Chuck because of its $1.99 price tag, says, "The American consumer is looking for reasonably priced, quality beverages; Charles Shaw proved to the American consumer that good quality wine does not have to be expensive."
Other times, the CEO of Bronco Wine Co. sounds like the industry's worst nightmare, a slayer of major dragons. Take these classic Franzia utterances:
"No bottle of wine is worth more than $10."
"Does anybody complicate Cheerios by saying the wheat has to be grown on the side of a mountain and the terroir in North Dakota is better than Kansas and all this horses---t?"
And, "California wine shouldn't be divided up into these little oligopoly appellations. They try to create a myth to keep the consumer from buying other people's wine."
While Franzia is good at playing the part of curmudgeon/consumer advocate, that's not why people buy his wine -- a seismic 300 million bottles of Two-Buck Chuck in five years, thank you very much. They buy it because it's decent juice at an unbelievable price, undercutting a cargo ship's worth of imports, Central Valley box wines and even, in some cases, beer.
Franzia "is almost single-handedly responsible for an increase in wine consumption among consumers in the United States," wrote Alder Yarrow of Vinography.com in a blog entry entitled, "Fred Franzia: Great Businessman or Wine Antichrist?"
"I believe strongly that Two-Buck Chuck was the catalyst that kicked off a surge of interest in wine," he continued, "and a reduction in the intimidation that consumers feel about wine."
Its quality-vs.-price ratio is truly astounding, Charles Shaw wines having won their share of medals at official tastings, proving themselves drinkable and adding to the buzz.
Franzia is, of course, no dummy; in addition to winemaker Bob Stashak, a 19-year veteran of Korbel, Franzia's got famed enologist Richard Peterson consulting for the wines, an alum of Gallo and Beaulieu, among other major California wineries. (He is also, ironically in this context, the father of Napa Valley winemaker Heidi Peterson Barrett, who is known for crafting a cult wine legend of another kind -- Screaming Eagle.)
But Two-Buck Chuck is also reflective of a cultural shift going on right now with wine, a desire by many to lessen the level of pretentiousness that dogs the subject in this country.
"There's a reverse snobbery with Two-Buck Chuck because people who really know wine can taste that the product is superior for its price point," said Eileen Fredrickson of Gomberg-Fredrickson & Assoc., a wine industry consulting firm. "So they enjoy showing off for their high-falutin' friends."
Clearly, for a previously untapped army of people, $1.99 a bottle is exactly the right price, a conservative, carefree investment in having a glass of wine on a regular basis. A fulfillment, and then some, of Franzia's vision.
For others in the industry, though, especially at the very crowded $10-and-under level, Two-Buck Chuck is a mysterious affront, a suspected loss leader (Franzia would deny the charge) that thumbs its nose at traditional markups, not to mention the investment needed to produce your average bottle of wine.
"I have winemaker friends who tell me it costs them $3 just to buy the glass," Fredrickson noted.
Yep, that's $3 for just an empty bottle. Then you need a label, cork or other closure, barrels, tanks, warehouse space, employees and, lest we forget, wine.
The unsubstantiated rumor early on was that Franzia was able to sell the wine at such a great price because it was surplus bulk, attained through his acquisition of the Charles Shaw Winery in Napa, which Franzia bought in 1995 for $25,000 from an investment banker in over his head.
Other rumors had it that the wine came from a bankrupt airline; another chalked it up to a wealthy philanthropist's desire to provide life's pleasures on the cheap.
For his part, Stashak explains that Franzia's secret weapon is that he owns just about everything he needs to make a lot of wine inexpensively.
"The Franzias have been very, very shrewd in that they've taken real control over their destiny," he said. "Not only do they own the brand, the production facility but, and I think most importantly, the grapes."
Some 40,000 acres of grapes, by most estimates, spread throughout the middle of California from Sacramento to Bakersfield. Franzia, a nephew of the late Ernest Gallo, learned early on the importance of owning the means of production.
"In 1912, my grandfather bought his first piece of ground and eventually produced wines in 1915," Franzia recounts.