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Yellow Tail on the Tail of Indian Population number

Posted: Thursday, 17 October 2013 12:17

Yellow Tail on the Tail of Indian Population number

Oct 17: Australia may not beat Indian population ever but only one of its producers, Casella wines that has just produced its billionth bottle since inception in 2001 may surpass India’s population in 3 years time despite difficult period due to glut and other factors in Australia, thus setting an example on how to continue expanding by satisfying the popular market demand rather than worrying about price points, an approach that could be a good example to follow for the Indian producers who feel straitjacketed in the current scenario

Yellowtail is the highest exported brand of Australia with a total of 11.9 million cases sold last year despite the difficult market conditions partially due to the strong Australian dollar= even as it slipped from the previous year’s 3rd ranking to the 5th ranking in the list of most powerful global wine brands. The famous yellow label featuring a kangaroo is exported to more than 50 countries including India where Berkmann Cellars India Mumbai took over from the initial importer Sonarys.

At the current rate of growth (last year was a drop of .2% but it expects to grow by 5% this year) it will cross over 1.4 billion bottles sold; a number that would surpass the population of India at that time in 2016. It started production in 2001 and quickly became a success story in marketing with the US totally enamoured by it; over 8 million cases are sold in the US Alone.

The factors contributing to its success are hard to pin down and could be a research subject for PhD in wine. It could well be the subject of dissertation for the Master of Wine curriculum! But the owner John Casella reportedly says he has always wanted to keep wine fun and simple and he didn’t want to intimidate wine lovers and would rather embrace them and enhance their social lives. "It should really be about innovation, creation of wine styles and exploiting the assets or the wine capabilities you have. We need to identify ourselves fairly strongly as different, rather than just following what somebody else does.’

As a part of expansion strategy and the innovation he talks about, Casella  created its 17th label-the Spanish innovated cocktail red Sangria in the Ready To Drink format last month in what was perhaps first such move from a non-Spanish mega producer in the world market, with a planned sale of around 1 million cases targeted at the Hispanic wine market in the USA. The white version is in the pipeline and will be released in about 4 months. DelWine was perhaps the first  to report about the innovative product. You may want to read it: Casella to introduce Yellow Tail Sangria

Casella has also announced recently the launch of a range of wine spritzers under the Bondi Road label in order to capture the young starters who would hopefully convert to its wines with time. At the lower end of the market, it will be bottled with lower quality of grapes that would otherwise be mixed into cheaper blends.

Casella is often blamed for the current woes of the Australian wine industry which is stagnating and struggling because of the continued overseas image of selling cheap wines, even as it continues to build on its success in the export market. However, he pooh-poohs the suggestion that Yellowtail might be the face of this image. "All of that is total nonsense. They should get on and create wines that people want and market those wines in a way that encourages them to try those wines and produce wines that win these consumers over, rather than worrying about what other people are doing at different price points,” he says. He claims he has managed to avoid some of the troubles that have beset other Australian wine producers and points to a lack of vision in the industry as one of its biggest problems,” he says.

In an attempt for an image makeover, the proprietor of Casella Wines-John Casella announced in Sydney yesterday that he is working on a premium quality range. Christened as Yellowtail 1919,  it will include a Shiraz and Cabernet Sauvignon brand using grapes from South Australia’s Barossa Valley, Coonawarra and Wrattonbully regions and will sell for more than 12 times the existing retail price of under $8, flirting with the three-digit number in the USA.

Casella has a Sicilian lineage and comes from a family of winemakers. In fact, the 1919 range represents the year when the first Casella family vineyard was planted in Sicily by his grandfather Giuseppe Casella on his return from World War I. The inaugural 2006 vintage of both the Cabernet Sauvignon and the Shiraz have reportedly won over 20 gold medals and trophies already. John says he is also considering introducing mid level wines costing around $15, $25 and $40 a bottle.

There could be lessons in the Casella story for the Indian wine producers who have seen tough times during the recent years. Sensing that the growth has to be driven by affordable wine for the consumers in smaller cities and towns, lower priced wines have made a foray in recent years. While Portugal has been watching helplessly and twiddling its thumbs, various producers have taken advantage of the fragmented but continued success of Goan ‘Port’ and have introduced their own versions to catch the imagination of the market in the sub-Rs.150 segment. Nashik Vintners already sells over 150,000 cases with an expected volume of 200,000 cases in the current year. Four Seasons, Fratelli and Big Banyan also are not lagging behind with Grover Zampa expected to jump in the fray soon with a Port and making the category expand.

Whether, there is a market for spritzers and sangria it is for the innovative producers to find out through market research and their market intelligence. There is a jungle of laws to contend with. But with a 600 million+ case non-wine, alcohol industry, the opportunities can be aplenty. Casella’s highly diverse range from Bondi Road and Casella 1919 could be inspirational to the pro-active producers.

Subhash Arora


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