Franzia speaks to SJ wine growers

A weak economy is causing the sales of high-end wines to plummet, but San Joaquin Valley growers — whose grapes are used in lower-value wines — are reaping the benefits.

Sales of wines under $6 grew by 5.5 percent in 2009, while wines priced $20 and higher fell by at least 20 percent, said Steve Rannekleiv, executive director of Rabobank International Food & Agribusiness Advisory Department in New York.

"It is no secret that super-premium wines have really fallen off a cliff," said Ranne-kleiv, speaking Friday at the annual San Joaquin Valley Winegrowers Association in Fresno. 

That's good news for Fred Franzia, president of Bronco Winery and a maverick in the wine industry. Franzia turned the industry on its ear several years ago with the introduction of Charles Shaw, nicknamed "Two Buck Chuck," a wine that has sold tens of millions of bottles.

He advised the valley's wine growers Friday that to remain competitive against growing foreign competition, they must be in tune with the varietals consumers are buying and the wineries they like.

Franzia said growers should strive to become more efficient by maximizing their use of water and contracting their harvesting to outside companies.

"There is no need to have your money tied up in your machines," Franzia said. "And a lot of it is underutilized."

Wine experts warn valley growers that the consumers are developing a taste for lower-priced wines from other countries, especially Australia, New Zealand and Argentina.

"Their target is the U.S. market, and we have a bull's-eye on our back," Rannekleiv said.

The sleeping giant among all the foreign competitors, Rannekleiv said, is Argentina, which has a long history of winemaking and lower production costs than valley growers.

But valley farmers — long known as the workhorses of the grape industry — produce the largest amount of grapes crushed in the state last year. Much of the tonnage is used for lower-priced wines.

Wineries such as E.&J. Gallo and Bronco, which both have operations throughout the valley, saw their value-priced wine shipments rise 3 percent and 7 percent respectively, said Jeff Bitter, vice president of the Fresno-based Allied Grape Growers.

Besides advising his valley colleagues on competing with foreign producers, Franzia also took the opportunity Friday to criticize the money California growers are forced to pay to battle the glassy-winged sharpshooter.

The insect is considered one of the grape industry's most feared pests because of its potential for carrying the vine-killing Pierce's disease.

Growers are required to help pay for the eradication of the insect and research into fighting the disease. More than $30 million has been spent on the state-run program since 2001.

Franzia called the program a "waste of money."

But Karen Ross, president of the California Association of Winegrape Growers in Sacramento, defended the program, saying that one of the reasons the insect and the disease are not a problem is because of the state's efforts.

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