Discount Dynasty

After scoring big with "Two Buck Chuck," renegade vintner Fred Franzia once again has Napa Valley's wine burghers in an uproar

In 2002, when Trader Joe's patrons began hauling away Charles Shaw wine by the case, no one was more surprised than Charles Shaw.

A Chicago software developer, Shaw, 61, long ago owned a small winery beside the Napa River near the town of St. Helena. After attending business school at Stanford in the 1960s, he went to France as an investment banker and became enamored of vineyards. In 1974 he and his wife, Lucy, settled in Napa Valley. They built a Nantucket-style house for themselves and their five children among rows of newly planted gamay Beaujolais grapes and converted an old hay barn into the Charles Shaw Winery.

But after a nasty divorce, his vintner's dream ended in bankruptcy. In 1994, the house and winery were auctioned off on the Napa courthouse steps for a pittance -- $1.6 million -- to a wealthy businessman and his wife. (They renamed the place Benessere Vineyards.)

Fred Franzia in His Office: "If anyone should 
be worried it's the Napa vintners, because 
we sure as hell aren't going away."
Gabriela Hasbun
Fred Franzia in His Office: "If anyone should be worried it's the Napa vintners, because we sure as hell aren't going away."
Trucks bring grapes to (and "juice" away 
from) Bronco Wine Co.'s sprawling Ceres 
plant around the clock.
Gabriela Hasbun
Trucks bring grapes to (and "juice" away from) Bronco Wine Co.'s sprawling Ceres plant around the clock.

The Charles Shaw trademark, however, wasn't part of the sale.

Amid little fanfare, it had been scooped up from bankruptcy court a few months earlier. "Considering that he had gone belly up, the Charles Shaw name seemed practically worthless," recalls vintner Tom Eddy, appointed by the bankruptcy trustee to help manage the property during the proceeding. Shaw's creditors were getting antsy, and Eddy says he suggested that the trustee sell the trademark "as a way of giving them a little something" while waiting for the disposition of the estate. "There was only one guy in the world I thought might be interested in buying a defunct Napa wine label, and that was Fred Franzia," he says.

For the relatively insignificant sum of $18,000, Franzia got the Charles Shaw name and about two dozen leftover cases of the failed winemaker's precious gamay, Eddy says. Franzia did nothing with the label for the next nine years; in fact, only a handful of people even knew he owned it. (Shaw and his ex-wife had no idea.) Then came the exclusive deal with Trader Joe's. California wines had long been sold for the equivalent of $2 a bottle or less in jugs and boxes, but Franzia's Charles Shaw wines appeared more upscale, packaged in conventional bottles with cork enclosures just like pricier wines.

The "new" Charles Shaw wine (bearing little resemblance to the premium vintage for which its namesake had attained respect, if not commercial success) hit the shelves in February 2002. At less than $24 for a case of 12 bottles, it sold as quickly as Bronco could bottle it, based almost entirely on word-of-mouth. There was no advertising campaign. Even Harvey Posert, a longtime marketing consultant to Franzia who is probably most responsible for the invaluable if seemingly unflattering "Two Buck Chuck" nickname, concedes that the wine "largely sold itself."

Urban myths soon sprang up around the wine. According to one tale, it was surplus from an airline that could no longer bring corkscrews on airplanes after the Sept. 11, 2001, terrorist attacks; another yarn held that Charles Shaw was a wealthy businessman willing to peddle the wine on the cheap as a way of teaching Americans about viticulture.

In Chicago, the real Charles Shaw got calls from friends who thought he had somehow gotten back into the wine business without telling them. "It felt strange, all the attention for something that bears my name but with which I had absolutely no connection," he says. His ex-wife recalls the "Two Buck Chuck" phenomenon with mixed feelings. "It brought back memories that are personal and painful," she says. For instance, the gazebo that adorns the label on every bottle evokes a real gazebo built next to the Shaws' former home by MGM for the 1982 movie Yes, Giorgio, starring Luciano Pavarotti, in which the Shaw winery served as a locale. "That's the kind of thing that no one would know," she says.

For someone who has spent huge amounts of money -- just how much he doesn't say -- battling Napa vintners in court, Franzia professes not to be overly concerned about the way things may turn out. "We've already won in the marketplace," he proclaims, asserting that even if the courts uphold the state law and rule that he can no longer sell wine from non-Napa grapes using his Napa Ridge, Napa Creek, and Rutherford Vintners labels, he'll still be able to do so in every state except California.

"That is, if I want to," he adds. "Or we could just put Napa grapes in there like we're already doing with [the] Napa Creek [label]. If anyone should be worried it's the Napa vintners, because we sure as hell aren't going away."

Franzia is wheeling his vehicle among seemingly endless rows of grapes on a 6,000-acre spread in the Montpelier wine-producing district, a half-hour northeast of Ceres. The scene is fit for a wine label, with the lush, grape-covered hills offering sweeping views of the Sierra Nevada.

There are few places that the grape titan would rather be; in fact, it is where he intends to build his dream home. The spot is picked out, and he has been planning it for 15 years, he says. But, as with the patiently opportunistic way he navigates the wine business, Franzia is in no hurry. "A person shouldn't rush to get everything they want," he says. "There has to be something to look forward to."

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