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Overview Casella Wines is the owner and distributor of one of the fastest gowing brands in the entire history of branding: the Yellow Tail Wine label. Yellow Tail is currenlty the number one imported brand in the US market, which is the world's fastest growing consumer market. It is criticized by wine conoisseurs as the antithesis of good wine due to its very chemical smell and very obvious fruity taste coming from the use of too much sugar. Due, precisely to its fruity taste, however, it has been very successful at luring consumers that have little or no wine expertise into the wine industry. The data below will focus solely on the Yellow Tail brand given the fact that it is an exemplary demonstration of the use of marketing to succeed in such a label oriented industry as wine. Parent Company History: Casella Wines Casella Wines was founded by Italian couple Filippo and Maria Casella who decided to move to Australia in search for a peaceful life in 1957. The couple had a hisotry with grape growing and when they arrived in Australia they decided to continue indulging in their family tradition by growing grapes and selling them to wine producers. In 1969, Filippo decided to use his grapes to produce his own wines. John Casella, son of the couple, took over the family business in 1994 and made the decision to expand the winery. Today, the winery remains family owned and has been awarded several Exporter of the Year Awards from the Agribusiness sector of Australia. Brand History: Yellow Tail Yellow Tail is a brand that was created exclusively for the United States consumer market in 2001. The idea for the name and image of the brand came as inspiration from the Australian environment. The Casella family was looking through a dictionary for kangaroo names and came across the name Yellow Tail in parenthesis for one of Australias common kangaroos the Yellow-footed Rock Wallaby. They decided that this would be the name of their new export wine and decided to leave the parenthesis for recognizability. They hired graphic designers to design an attractive label and proceeded to launch a marketing campaign that included television and magazine ads as well as billboards. Sales History 2001: Yellow Tail is introduced into the United States market. Management expects to sell 25,000 cases in the first year but they sell 200,000 instead (9 times the predicted amount). This success officially makes Yellow Tail the most successful wine brand launch in history. 2004: 6.7 million cases sold in the United States in a market where only 23 of 6,500 brands sold more than 2 million cases June 30 2005: Yellow Tail repted after tax profit of $77 million with revenue of $255 million. This was a significnt rise from $61 million in after tax profit with $230 million profit in 2004. November 2005: Yellow Tail becomes the first variety wine to sell one million cases in a single month. It sells 7.5 million cases during the year. 2003-2006: Yellow Tail exports to the United States grew 90% compared to overall Australian export growth to the United States of 49% 2006: Yellow Tail is the only brand to appear in the top 12 wine brands sold in the following - grocery, natural grocery, convenience, drug and liquor stores. Competitive Advantage Yellow Tail has a very "new world" menality and regulation which is helping it attract new consumers who are intimidated by their lack of knowledge about wine. Althought this sounds like a relatively simple, unimportant competitive advantage it is actually very powerful, and very key. The Old World is tormented by stringent labeling rules that make thier labels very intimidating to "amateur" consumers. Yellowtail's labels are consumer friendly and complication free because they carry a simple design which is a brand rather than an explanation about the grapes, soil, or aging process used. Yellowail does not on allowing its wine to age, thus its wine lacks the oak palate that many wine conoisseurs look for in good quality wine. This has been a competitive advantage because its market is quite the opposite of wine conoisseurs. Yellow Tail's fruity flavor is very attractive to the virgin palate. Struggles It has been pointed out tha Yellow Tail is currently enjoying a period of growth due to the fact that the wine consumer market in the United States is very new and still getting accustomed to wine consumption. Some worry, however, that this growth is not sustainable because Yellow Tail serves the purpose of an introductory wine. There is a risk to lose market as consumer get more acquainted to and accustomed to wine, especially because wine consumers are knwon to be very disloyal. This might result in consumers switching from Yellow Tail to more premium quality wines. Yellow Tail, however, has already predicted this potential shift and just began introducing a better quality Reserve label wine at a higher price and with a better production process. Current Strategy Continue to tap into new consumer markets. It has been experiencing equal success in Canada and in the United Kingdom Becoming Global Australia has a very small domestic market for wine with little potential for wine. For this reason, its wine industry must focus on foreign markets in order to maintain stable growth and profits. In 1994, John Casella hired export-oriented John Soutter to make his own wine company export oriented. Today, 95% of Casella Wines' sales are exports. Yellow Tail is distributed in the United States through W.J. Deutsch, one of the largest wine importers in the United States. Yellow Tail did not seek to enter the market alone and was willing to give W.J. Deutsch 50% control over the label. This gave the label instant access to prime distribution networks in 44 states. |
