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San Francisco Chronicle
19-06-2025
- Business
- San Francisco Chronicle
How the new CEO behind Two Buck Chuck plans to ‘win' the wine crisis
Dom Engels has got to have one of the toughest jobs in California wine right now. In November, he became CEO of Bronco Wine Co., which produces an estimated 3.5 million cases annually of some of the country's most famous bargain-priced brands like Crane Lake, Salmon Creek and Charles Shaw, a.k.a. Two Buck Chuck. Engels has arrived at a moment when the wine industry is in a tailspin. The sub-$10 category, Bronco's bread and butter, is experiencing some of the sharpest sales declines. Since the beginning of the year, Bronco, which is owned by the Franzia family, has laid off 227 employees from its Central Valley headquarters. But Engels claims to relish the challenge. 'I love the complexity of trying to win in a difficult environment,' he said. 'Because there are always winners.' The vision he has for Bronco runs counter to much of the industry's conventional wisdom. Engels believes that 'premiumization,' the march toward ever-higher prices, did a 'disservice' to consumers. That the fast-growing ready-to-drink category, which encompasses canned cocktails like High Noon, is overrated. That organic wine will always remain a 'niche.' His perspective is largely one of an outsider. Although Engels worked at the Wonderful Co. when it acquired Paso Robles' Justin Vineyards and Sonoma's Landmark Vineyards, he has mostly worked in other fields. Before joining Bronco he served as the CEO of the school-lunch producer Revolution Foods, and before that as CEO of Stone Brewing, a behemoth of craft beer. Looking at the wine industry, 'honestly, I draw a lot of analogs from the craft beer dynamics over the last eight or nine years,' Engels said. When he joined Stone in 2016, craft beer was consistently seeing double-digit annual growth. That changed somewhat abruptly, a couple of years before the wine industry's own wake-up call. The luxury tier is way outperforming the value tier right now: Sales of wines over $50 increased 1% last year, according to the Wine & Spirits Wholesalers of America, while wines priced $8-$10.99 dropped 12.7%. Many of Bronco's best-selling products are under $5. But Engels is undeterred. 'We firmly believe that the value segment is very important for creating lifelong loyalists,' he said. The premiumization trend completely ignores 'the funnel of new 21-year-old consumers.' That said, Bronco is also inching up, a little bit. 'We are probably overindexed in value,' Engels admitted. Without abandoning Two Buck Chuck, he hopes to also play more in the $15-$20 range. In February Bronco acquired Wine Hooligans, a Santa Rosa winery whose bottles sell for $12 and up. Recognizing that Bronco's value-priced wines have been treated 'more like labels than as true brands,' Engels is building out his brand marketing teams. Crane Lake Chardonnay, $4.49 at a local Total Wine, may not have seemed like a strong branding opportunity in the past, but Engels believes wines like these could benefit from a bigger social media footprint. He also plans to open more tasting rooms — a priority informed by his time working with beer taprooms. Of the more than 100 brands Bronco owns, the only public space in California is Rosenblum Cellars in Oakland. He imagines opening something at Wine Hooligans, in a Santa Rosa industrial park, and at the home winery in Ceres (Stainslaus County). 'I think we should have a couple of billboards on the 99, really invite people to see what we're doing here,' Engels said. Does that mean we can expect a Two Buck Chuck tasting room? Engels laughed. 'Not sure about Charles Shaw,' he said. More likely is a 'multi-brand specialty store,' spanning the Bronco portfolio. At the same time, like many of its peers, Bronco is contracting. The company has removed some of its vineyards, a response to California's grape surplus, and 'moth balled' others — pruning them short and letting them lay dormant until the company has the need for the acreage again. Bronco is a major California landholder, with the capacity to farm 'a significant five-digit number of acres,' Engels said, but is currently farming 'in the middle four digits.' All of the grapes Bronco farms are 'sustainable,' Engels said, a term that adheres to certain environmental standards but still permits the use of synthetic herbicides like RoundUp. A small amount of Bronco's vineyards are organic, and Engels doesn't have plans to expand that. Organic farming requires such high costs that it necessitates higher-priced wines, in his view, 'and I don't think the market necessarily always rewards that premium price,' he said. The company is also contracting its workforce, new brand marketers notwithstanding. The 227 workers laid off in Ceres included mechanics, lift truck operators and viticulturists. 'It's hard, but I don't think the winery's ever really adjusted its workforce in the 50 years before I joined, and I think there are a lot of wineries like that,' he said. 'You go on a diet first before you reach the lifestyle change phase.' In Bronco's case, that lifestyle change will not involve ready-to-drink, the ultra-fast-growing category of beverages that encompasses canned cocktails and hard seltzers. The space is too crowded. 'They're churning very fast and it's very difficult to build something there,' he said. 'We're not seduced.' He is intrigued, however, by half-bottles and boxed wines. (Despite being owned by the Franzia family, Bronco does not own the boxed-wine brand Franzia.) Tough as his job may sound, don't feel bad for Engels. He's having fun, he swears. 'When the tide is ebbing, that's what really separates great operators from folks that participated as a passenger in the category growth,' he said. 'I love that.'
Yahoo
25-04-2025
- Business
- Yahoo
Stanislaus-based winery announces 146 more layoffs. First wave was 81
Bronco Wine Co. will lay off 146 more employees on top of the 81 announced in February. The company, based south of Ceres, announced the new job losses in a notice to the California Employment Development Department. A company spokesperson could not be immediately reached for comment Thursday, April 24. Before the first round, Bronco had employed about 750 people at four plants. Three make wine: off Keyes Road in Stanislaus County and near Escalon and Madera. A bottling plant is in Napa. The first layoffs took effect April 8, and the second round will be as of June 16. They include subsidiaries WC Ag Services, Inc., which operates vineyards, and Bivio Transport and Logistics Co. LLC. The locations were not specified for the layoffs, which will be permanent. The moves come amid a slump in the California wine industry. Experts have attributed it to changing consumer tastes and an oversupply of grapes, compounded recently by tariffs. In its first layoff notice, Bronco cited 'a significant downturn in business revenues, necessitating a major reorganization in operations and workforce.' Bronco was founded in 1973 by three grandsons of Teresa and Guisepe Franzia, who built their namesake winery in northeast Ripon in 1906. Bronco does not own the Franzia boxed wine line, which is part of The Wine Group, based in Livermore. Bronco sought from the start to make wine affordable to more people, mostly famously Two Buck Chuck. That was the nickname of the Charles Shaw label, initially selling for $1.99 at Trader Joe's. Fred Franzia was the most prominent leader following the launch with his brother, Joseph, and their cousin John Franzia. Fred died in 2022 and John in 2024. Bronco has extensive vineyards in the San Joaquin Valley, as well as premium coastal regions. The company remains under family ownership and does not disclose financial details. Stanislaus County also faces job cuts in its poultry industry. Foster Farms announced in January that 519 raw turkey workers in Turlock would be let go as of May 9. The cooked-turkey portion of the operation will continue. Turkey workers could seek openings in the company's Valley chicken plants. Displaced people in all types of business can get help on retraining and other services at Stanislaus County Workforce Development.
USA Today
24-02-2025
- Business
- USA Today
Producer of Trader Joe's 'Two Buck Chuck' wine announces 80 layoffs in California
Producer of Trader Joe's 'Two Buck Chuck' wine announces 80 layoffs in California Show Caption Hide Caption Master Sommelier shows us his favorite, affordable wines Master Sommelier Vincent Morrow shows us his favorite, affordable wines. Psst: they are all available at Trader Joe's. Fox - Ktvu The maker of Trader Joe's Charles Shaw wine, known as "Two Buck Chuck," announced more than 80 permanent layoffs at its Stanislaus County headquarters last week. Bronco Wine Co., based in Ceres, has been family-owned since 1973 and includes multiple brands, according to its website. The layoffs were listed as part of the Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act requires employers with 100 or more employees to provide 60 calendar days' advance notification of planned closings and mass employee layoffs. Bronco Wine Co. and its affiliated entities, Bivio Transport and Logistics Co., LLC and WC Ag, are listed. The notice for 81 permanent layoffs was filed and processed on Feb. 6, according to the listing. The layoffs are scheduled for April 8. The company cited "a significant downturn in business revenues, necessitating a major reorganization in operations and workforce," according to the San Francisco Chronicle. Eliminated positions include drivers, lift truck operators, mechanics, security officers, cellar supervisors, viticulturists and microbiology technicians, according to the publication. Besides Charles Shaw, the Bronco Wine Co. portfolio includes Rosenblum Cellars, Carmenet, Picket Fence, Crane Lake Cellars and Longevity Wines. Shockwaves for DC regional economy: Trump layoffs spur surge in jobless claims Charles Shaw wine history Fred Franzia, the California winemaker who created the Charles Shaw wine brand, died in September 2022 at the age of 79. In 1973, he founded Bronco Wine Company in Ceres, in the San Joaquin Valley, south of Stockton, with his brother Joseph and cousin John. Wine Spectator labeled Franzia the "Bad Boy of California Wine' for his contempt of high-end wine and the company began buying bankrupt vineyards in the '80s. Bronco acquired the Charles Shaw name in 1995 for just $25,000, Wine Spectator reported. That led to Bronco Wines launching the Charles Shaw wine for $1.99 at Trader Joe's stores in California in 2002. The layoffs come after a handful of small wineries including Carlisle, Tarpon and Vinca Minor, have shut down, according to the Chronicle, and large-scale companies like Southern Glazer reportedly laid off hundreds of employees last fall. Mike Snider contributed to this report. Wes Woods II covers West County for the Ventura County Star. Reach him at 805-437-0262 or @JournoWes.
The Independent
13-02-2025
- Business
- The Independent
Wine company behind Trader Joe's ‘Two Buck Chuck' lays off dozens of workers amid ‘significant downturn'
The California winemaker behind the famously affordable Charles Shaw wine — better known to some as the Trader Joe's staple "Two Buck Chuck" — announced last week that it plans to layoff 81 workers. The affected employees at the Bronco Wine Company, which filed a WARN notice on February 7 announcing the layoffs, all work at the business' winery in Stanislaus County, according to SF Gate. WARN notices are generally legally required to be filed with state governments prior to mass layoffs. "Bronco Wine Co. today announced a reduction in force (RIF) impacting a number of positions across the organization, as part of a strategic restructuring plan to enhance operational efficiency and adapt to the challenging headwinds in the wine industry," the company said in a statement. "Bronco Wine Co. made this decision after careful consideration to streamline operations and position the company for long-term sustainability in the face of shifting population demographics, consumer trends and industry headwinds, and over supply of wine grapes in the marketplace." The notice says that the layoffs were needed due to the current state of the economy and upcoming changes in the company's organization. 'This action is necessary due to a significant downturn in business revenues, necessitating a major reorganization in operations and workforce,' the notice says. The layoffs are scheduled for April 8 and will eliminate a lift truck operator position, a security officer, an IT tech, a viticulturist and a cellar supervisor, according to the notice. Once the layoffs are over, only 670 staff will be left working for the company in Stanislaus, Madera, Napa and San Joaquin counties. Bronco Wine told SF Gate that shifting demographics and an oversupply of wine making grapes were among the reasons for the layoffs. 'This was a difficult decision, and we deeply value the contributions of all our employees,' Dominic Engels, the company's president and CEO, said in the statement. 'We are confident these strategic adjustments will enable Bronco Wine Co. to remain a leader in the wine industry and continue delivering high-value wines to our customers.' Bronco Wine Company was started by Fred Franzia and his brother in 1973 after the family's original wine business, Franzia, was sold to Coca-Cola. In 1995, the company acquired Charles F Shaw Winery after that company filed for bankruptcy. Under Franzia, the company began offering the now-beloved "Two Buck Chuck." The actual Chuck — Charles Shaw — never took a liking to the wine or his name being attached to it, calling it "embarrassing and demeaning." Prior to its acquisition by Franzia, Charles Shaw sold wines that cost as much as $50 per bottle. Bronco isn't the only winery hurting right now. Wine consumption has been on the downturn, and wine makers across the world are feeling the effects. At least three wineries in California — Carlisle, Edmunds St John, and Vinca Minor — have all announced their closures.
