In a rare and much anticipated public address, Bronco CEO Fred Franzia delivered the January 26 keynote speech and, with it, set the stage for the 2016 Unified Wine & Grape Symposium in Sacramento. Franzia paid homage to the founding figures of the California wine industry, including his uncle Ernest Gallo, with a look back at their history and, with his characteristic candor, tackled some of the trade’s most relevant topics.
As the nation’s largest vineyard owner — Bronco Wine owns in excess of 40,000 acres — he was quick to count grape growers among the most interesting and opinionated people he deals with in the industry. He credited Central Valley growers with teaching him much through the many hours he’s spent in their company over the last 50 years. Expressing regard for his peers and fellow industry icons Robert Mondavi and Jess Jackson, Franzia pointed to their similar practice of always tasting blind and their keen ability to critique what they tasted.
On the subject of industry growth, Franzia was at once optimistic and pragmatic. His conviction that each grower needs to plant the right variety and farm efficiently was a recurring theme throughout his address. In tackling the “perceived” problem of over supply, he said, “Forty percent of the wine market isn’t being supplied by California. Growers need to increase grape supply from their own vineyards.”
Given the challenges Napa and Sonoma counties face with vineyard expansion, he cited San Joaquin Valley as the most productive region and the next source for high-quality wine. “San Joaquin has the infrastructure necessary to process the wines and meet the demand side,” he said. “The future will be bright and Lodi growers are in there whether they like it or not.”
Quoting industry source Mel Dick, he noted that U.S. consumption now stands at 327 million cases annually: “If we drank as much as the United Kingdom, that number would double, but we’d need to drink 1.6 billion cases to match the French,” he said. Bronco’s 20 million annual case volume contributes significantly to the bottom line, and Franzia believes U.S. consumers can achieve that ambitious goal by 2040.
With the Wine Group, Constellation and larger wholesalers on an acquisition binge, Franzia advises keeping a close eye on the growing power of the unions. “2015 was a banner year for consolidation,” he said. “Eventually, we’re going to have three elephants in the room, and the circus will be overrun by the mice. Someone will start a non-union shop and get the business.”
Speaking to Treasury Wine Estates’ recent purchase of Diageo’s wine portfolio, Franzia is optimistic about the company. “Despite all of the transitions that it’s gone through, from what I’ve seen in the last two years, they’re back and going to get stronger. Buying Diageo was a good move,” he said.
“Get smart” was his political call to action regarding subsidized labor costs, the politics that accompany it and the inheritance tax that works against family succession. “We don’t take politics seriously enough to get what we want. [Politicians] focus on the small stuff at the expense of the big stuff,” he said.
In a touching tribute to the late vintner Louie Petri, Franzia thanked the Wine Group for letting Bronco acquire the Petri name and announced the company’s intention to reinstate it in use at the winery in honor of his legacy. Petri was instrumental in founding the Allied Grape Growers and, in 1953, his Escalon winery was the largest domestic producer of wine.