By the thinkBIG Team
From humble origins in southern Italy, then Griffith in the Australian NSW Riverina, the Casella family has been on an incredible ride.
More than two million glasses of the family’s Yellow Tail wine are enjoyed around the world each day. Casella Wines has done better than most global beverage companies to produce what is now the top-selling imported wine brand in the US.
Sales of Yellow Tail now account for around 40 per cent of all Australian wine sold in the US - and it’s fighting for the spot of top-selling wine brand in the US.
“We are only a small percentage behind or in front of Berringer, and we tussle for the No spot 1 for most sold wine brand in the US,” says a proud John Casella, who has managed the family company since 1994 after his parents Fillipo and Maria started the winery in 1969.
“It was my father’s dream to have us working together at the winery, so when the opportunity came through, we were all committed to working together,” he says.
And so the family has, propelling Casella Wines to an unparalleled international rise with its Yellow Tail brand, the most successful ever Australian wine exported overseas.
The Yellow Tail Merlot is the number one selling merlot in the US and the Shiraz is the number one selling red wine (and the Number one Shiraz), according to AC Nielsen figures.
The Yenda winery in size is now Australia’s second largest. State-of-the-art vineyards and wine production facilities have allowed Casella Wines to maintain huge export orders and to develop growing markets.
Demand for Yellow Tail is unprecedented. Its bottling line at its Griffith winery is the world’s fastest – processing 10 bottles a second, with the line operating 24 hours a day, seven days a week.
The winery’s total production will be 13 million cases of wine in 2008, with the export-focused yellow tail accounting for 11 million cases. Casella Wines is now Australia’s third largest wine company and the biggest family-owned wine business.
The company expects its profit to reach $45 million in 2007-08 financial year on expected revenues of $360 million, compared to a net profit of $55 million in 2006-07 on revenue of $360 million, helped on by strong sales of Yellow Tail, which was launched onto the international wine scene in 2001 and has quickly become a global wine phenomenon.
This is huge success for the company, wholly managed by the Casella family. John’s brother Joe is the Australian sales director while Marcello is the director and vineyard manager. Joe’s son Phillip is the Yellow Tail brand manager and winemaker.
The secret of the family’s success, says John Casella, has been its focus on the yellow tail brand and dedication to all facets of the business – from the product to sales and marketing.
“Dedication to your trade, to your business and your industry and a good understanding of your product and a good understanding of what customers want have all been vital to our success,” says Mr Casella.
Casella Wines has focussed almost exclusively on its Yellow Tail brand, made famous by a yellow-tailed kangaroo on the label. The brand’s appeal has been achieved through its simplicity, smart label and attractive price point.
The wine is known for its full fruit flavours and softness – but without the harsh tannins or acidity of some wine. Year after year, Yellow Tail delivers the same consistent taste, which has kept value-conscious customers around the globe happy.
“We offered the right product at the right price point at a critical time in the US, where consumers were looking for something different,” says John Casella.
“The packaging was attractive and the product was a little different with its softer, rounded fruit-forward flavours that consumers hadn’t seen before and the Americans were impressed. At $US6 a bottle, it wasn’t a big outlay for consumers because there’s a lot more scope for consumers to try a new product at a lower price point,” he says.
“A lot of the growth in the US came from word of mouth but also a wide distribution. The product was so successful because it delivered satisfaction.”
Apart from the US, other major export markets include the UK, Germany, Japan, Canada and other European countries.
Yellow Tail retails in the US at for $US6.99 for a 750ml bottle and $US11.99 for 1.5 litres. Locally, the wine sells for about $10 a bottle. The Yellow Tail range is extensive, including Chardonnay, Shiraz, Merlot, Pinot Grigio, Riesling, Rose, Cabernet Merlot, Cabernet Sauvignon and Pinot Noir.
In Australia, the product is growing quickly despite stagnant wine sales overall. “We’re growing at a rate above 20 per cent a year in the Australian market given our price point and, despite the competition in the domestic market, we’re doing very well,” says John Casella.
Domestically, the brand now holds the number two spot behind Jacob’s Creek in the $7-to-$10 bottled wine segment after it’s local launch in 2003.
Casella Wines prides itself on being a private family company – and there is no intention to change that. “There used to be a lot of approaches to buy the company in the early days. At this point in time, there’s no intention of selling or going public. We’ve come this far as a family to keep it as a family company and not to work for other people. And we don’t need to be public to raise the money.”
As for an impending economic downturn here and in the US, Casella is confident that the company can ride any downturn. “Given the price point we’re at, we’re at the value end, we may not be as affected as much as higher prices wines, say those over $20. During a recession, you can’t sell anything for more than $10,” says Casella, who adds that consumers are more likely to look for value in a slowdown and buy Yellow Tail instead of more expensive brands.
Going forward, the company will stick to its successful formula of focusing on Yellow Tail to expand its export markets. “We are always looking at other opportunities, but the brand is doing well and we don’t want to dilute our opportunities and our efforts with Yellow Tail. We want to stay focused on that brand,” says Casella.
