'Two Buck Chuck' Wine Aims for Both Quality and Quantity

The maker of "Two Buck Chuck" turns the wine industry on its head.

August 12, 2009, 11:52 AM

Aug. 13, 2009— -- For many wine aficionados, the mystique and romance of winemaking is irresistible. Each step in the process -- from the soil in which the grapes grow to the barrels in which they age -- adds a layer of flavor to the final product so that no two bottles of wine are ever truly alike. Or so they say. One man, Fred Franzia, is trying to deflate these highbrow notions, and just so happens to be making a fortune in the process. Never mind the romance associated with wine. What Franzia sees in his vineyards is much more tangible: Money.

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Tellingly, Franzia's operation is headquartered far away from the winemaking establishment in Napa Valley and Sonoma County, which he dismissively calls "the Disneyland for wine." He's set up shop hundreds of miles away in the crop bowl of California known as the Central Valley.

Here, land is cheaper -- $8,000 an acre versus hundreds of thousands of dollars per acre in wine country -- and, according to Franzia, every bit as good.

Franzia's Bronco Wine Company operates 60 to 70 square miles of vineyards -- that's 40,000 acres of grapes which he says is key to making economical wines. Franzia doesn't like the word "cheap." He prefers "value" or "super-value," which is what he calls his best-known brand, the wine known as Charles Shaw, or by its fans as "Two Buck Chuck."

He dismisses the idea that the soil in Northern California's wine country is superior to that of the Central (or San Joaquin) Valley, and that when consumers pay more, they're just paying for flashy marketing, not quality.

"The only thing they have in Napa that's different from here is they have 400 public relations people telling you that story and wanting you to believe it so they can justify their monuments they built for themselves, and pay the prices and pay the premiums of their debt. There's no wine worth $50 a bottle."

You won't find him describing wine the way many aficionados do, using terms like "bouquet" or "mouthfeel," and his prices are equally down-to-earth. For better or for worse, Franzia makes wines for the masses.

Massive Operation Is a 'Moneymaking Factory,' Says Franzia

His vast acreage allows Franzia to grow not just a massive amount of grapes -- 400,000 tons each year -- but also a staggering variety, including Pinot Noir, Chardonnay, Merlot, Zinfandel and Shiraz among others. Almost all of Bronco's wines sell for $10 or less per bottle.

Between his Central Valley vineyards and a few parcels of land in Napa, Franzia produces 20 million cases of wine a year, under 35 different labels.

The most famous of these is Charles Shaw which sells for $2 to $3 a bottle at Trader Joe's stores across the country. When asked how he sells wine for virtually the same price as a bottle of water, Franzia is characteristically frank.

"They're overcharging for the water. Don't you get it?" he said.

Still, at $1.99 a bottle, how does Franzia make any money?

"We make money," Franzia insisted. "And Trader Joe's, who's our partner with the Charles Shaw label, does all right, also."

Franzia says he generates a profit through economies of scale: The massive size of his operation means that overhead cost per bottle is significantly lower than that of his competition.

"Our grape rows are a mile long, some are two miles long. We don't have to turn the tractors around. And we produce grapes here because we've got more sunshine, and we've got water, those are the two key ingredients," he explained to ABC News.

If you're expecting the beautiful stone buildings depicted in the 1980s TV show "Falcon Crest," forget it. Bronco's bottling plant near Modesto, Calif., has a certain oil refinery quality to it.

"It's a moneymaking factory. It's a winery. It's the way the wines are made to keep competitive in the world," Franzia said.

Asked how long his wines typically age, Franzia laughed and said, "Hopefully about 24 hours."

Actually, his grapes go from harvest to table in about 100 days, which is still a quick turnaround.

Franzia laughs at the suggestion that his grapes are "freeway-aged," a reference to their journey up the highway from Bakersfield to Modesto, where they're crushed, stored and fermented in massive, industrial-size stainless steel tanks. The tanks are so wide that each inch of depth produces 6,000 bottles of wine.

Franzia: 'I Don't Make Wine to Put in a Closet. We Sell Wine to Drink.'

But he's only half-joking. Franzia's approach to winemaking is stridently pragmatic and he has little patience for those who believe in the mystique of aging wines in ancient oak barrels or in dark wine cellars.

"I don't sell wine to put in a closet. We sell wine to drink," he said. "When the wine's ready to be bottled, it's bottled ready, there's no aging process that's needed ... the rest is just a myth ... I love the French people that go, 'Well, in 20 years this wine's going to be perfect.' Well, don't waste the money. I don't want to wait 20 years to drink a wine. Nothing's worth it. So drink ours now and enjoy it."

If you're wondering how Franzia can claim his wines are "vinted and bottled in Napa," it's because the bottling plant really is in Napa, even if not all his grapes are grown there. He also buys quite a bit of excess wine from Napa vintners, and occasionally acquires bankrupt labels.

Still, critics claim Franzia plays fast and loose with the Napa name. Not surprisingly, Franzia has a response to these criticisms.

"The wine's been bottled in Napa. It's a California wine. We're very proud of that, so we're not making any claims to it. They can claim everything they want to claim. Whether it's true or not, they let their consumers be the judge," Franzia said.

Despite his unorthodox approach to the craft, winemaking has been in Franzia's blood from birth. It was the family business, started almost 100 years ago by his grandfather, Guiseppe Franzia.

"We just have it in our DNA and we choose to grow grapes, be in the business and sell wine at prices that people can afford to drink wine every day at the table, that's what we're looking for," he said.

Franzia grew up working in the family business, but was shut out -- and lost the rights to use the family name -- when his father's generation sold the company to Coca-Cola in the 1970s. That's when Franzia, his older brother Joe, and cousin John struck out on their own and founded their company, "Bronco."

Two Buck Chuck: 500 Million Bottles and Counting

Why didn't they just take the money and run after the family sold the business?

"It's what we want to do. We want to be our own boss, we want to be in control of the quality level, and we don't want to drop the quality level to the consumer or charge more for it. We choose to be where we're at, and we're proud of the fact that that we can supply wines at the prices we do. It's not accidental, believe me," Franzia said.

One of the bankrupt labels Bronco bought was Charles Shaw. Now they have shelves full of brands -- including Napa Creek and Napa Ridge.

At age 66, Franzia's not thinking about slowing down, especially not as he's about to sell his 500 millionth bottle of Two Buck Chuck.

In spite -- or perhaps because of -- his focus on the bottom line, Franzia insists his model is good for the industry as a whole, making wine accesible to more Americans. "I'm not a bad boy. I'm in the wine business to make money. That's good for the country, I think, and good for the consumer," he said.

As his affordable wines gain some traction with the wine establishment -- his 2005 Charles Shaw Chardonnay was honored as "best chardonnay" at the California State Fair Commercial Wine Competition -- Franzia is increasingly disdainful of his higher-priced competitors, and their claims to superior quality.

"We do the same thing and it doesn't cost money. So, one of us is telling the truth and one of us isn't. You take your choice," he said.