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EDITORIAL
The May 18 issue of the influential “New Yorker” magazine features an article about a sixty-five year old, twice-divorced American wine entrepreneur called Fred Franzia. It is an interesting piece, wholly objective and sometimes overtly critical. The writer clearly doesn’t like Mr Franzia, whilst reporting his success. It’s not the sort of article you would write about anyone here if you didn’t want your car blown up. But for the every-day wine consumer it is fascinating. When I say “everyday wine consumer” I am talking about the lady or gent who buys modestly priced wine from supermarkets and who eats out at simple tavernas.
Fred Franzia owns 40,000 acres (16,187 hectares) of vineyards in the USA, more than anyone else. He also buys in grapes (and wine in bulk). In his own wineries he crushes three hundred and fifty thousand tons of grapes a year. The pressing of his own grapes and the bought-in wine translates into twenty million cases (that’s 240 million bottles) a year. His company, Bronco, has an annual turnover of more than $500 million.
But the big thing about Franzia is price. In his home state of California he distributes his wine himself and it retails at $1.99 (€1.48). Elsewhere in the USA he has to use distributors and many of his wines sell for $2.99. (€2.15). He believes no bottle of wine should cost more than $10.00 (€7.40).
Of course, all this doesn’t endear him to the elite of California’s wine industry, but the public lap up his wines which are marketed under many brand names. Because of the diversity of sources, consistency is a problem despite Bronco’s huge investment in laboratories, specialist staff and quality control systems, but the buying public doesn’t seem to care. The wines are mostly varietals like Chardonnay, Pinot Grigio, Cabernet Sauvignon and Pinot Noir and don’t excite the critics, but a 2007 Chardonnay did please them and won a double gold award at the California State Fair.
From all this it is the customer who benefits, because not only does Bronco reach wine drinkers who have low disposable incomes, but its competitive position forces other producers to examine their prices. The “New Yorker” piece pointedly remarks that the present recession will almost certainly bring Franzia more business.
His declared aim is to quintuple his sales to a hundred million cases a year. This will make it necessary to have his own glass making plant (at present the only one which has is the daddy of them all, E & J Gallo, whose Joseph Gallo is Franzia’s cousin). For this he is “saving up his money”. He told the interviewer: “The lenders would give us anything we want. But you won’t see me borrowing money. We’re so solid, it’s scary”.
Just think, if more people took the same view as Fred Franzia, there wouldn’t have been a recession would there? And while we’re at it, when are the people in the wine and catering businesses here going to catch on to the thought that bargains create business?
Patrick Skinner
Notes:
The “New Yorker” article was illustrated with a caricature by the great British artist Ralph Steadman, here reproduced in black-and-white. Not exactly flattering to Mr Franzia, probably, but I bet he’s tried to buy the original! Steadman’s barbed cartoons famously graced the pages of the Sunday Times for many years and he has lampooned countless politicians. He has authored numerous books and widely exhibited his art. Now in his 70s he is working as hard as ever, an example to us all.
