We all know it (and maybe love it) – Yellow Tail wine. The biddies talk about how Yellow Tail, out of Australia, was basically invented for the American market. It’s a really interesting story and a tour de force of product development and marketing strategy that changed the wine label game worldwide and the Australian wine industry forever.

Listen:

Listen here.

On Spotify

On Apple Podcasts

We’re also on Stitcher, iHeartRadio, Player.fm, Overcast, CastBox and iVox

Sources:

Who We Are – Deutsch Family Wine & Spirits

[yellow tail] | Casella Family Brands

The Yellow Tail Story: How Two Families Turned Australia Into America’s Biggest Wine Brand | VinePair

Study Notes On Yellowtail:

*Please note these are the literal notes we created to record the podcast and sections may be copied and pasted from our sources above.

PROFILE: Yellowtail

  • In 1992 Australian wine accounted for only 3% of all imported wine to the United States
    • For context (Italy – 30%, France – 50%)
  • At the time, there were two tiers of wine
    • THE HIGH (Penfolds, Heschke Hill, Torbreack); only known by the top collectors around the world who had money to spend
    • THE LOW (sweet fortified wines, goon bags)
  • In 2002 Australian wine had captured 20% of the US import market and the only reason it did was because of … Yellow Tail 
  • Yellow Tail has only been on the market for 22 years

“Affordable Consumption” 

  • In a short amount of time this wine became easily associate with everyday drinking (or if you’re me in college – paper writing wine)
  • If you’re around our age this wine could’ve easily been one of the first wine you consumed, whether by sneaking it from your parents fridge or bought by hot Tyler who lived across the hall
  • The mission was to make everything incredibly accessible –
    • The flavor profile
    • The market dominance
    • The bright colors and animal label
    • The synthetic cork (much harder to break)
    • VinePair claims to suit the Coca Cola tastes of the American consumer 
  • One of the fastest growing brands in history 
  • Did it put Aussie on the map or hurt Australian wine?

Then Deutsch Family Wine & Spirits met Casella Wines….

Deutsch Family Wine & Spirits 

  • 1981: Bill Deutsch founded W.J. Deustch & Sons on the east coast with boutique agency brands from France
    • He wanted to run a family owned company that would import and market fine wines from family owned producers
  • 1982 – Bill partners with Geroge Duboeuf
    • This brand becomes the first million case French wine brand
  • 1984 – Bill adds his first Italian brand to the portfolio, Pozzi Family
  • 1985 – Deutsch Family enters a partnership with Francis Ford Coppola Winery to manage their sales and marketing for the eastern US
  • 1998 – Expands to the new word with Casella Wines from Australia
    • They said they had been selling French Wine for 20 years and were looking to play in the sub $10 price level out of France so looked to Australia

Casella Family Brands

  • 1957 – Founders Filippo and Maria Casella migrate for Sicily 
  • 1965 – They purchase “Farm 1471” which becomes the future home of Casella Family Brands near the township of Yenda outside of Griffith, NSW
    • They begin growing grapes for local winemakers
  • 1969 – The Casellas produce their very first bottled wines
  • 1971 – The Casellas have their first ever proper vintage with 50 tonnes of fruit 
  • 1975 – The winery starts the first phase of expansion 
  • 1995 – Twenty years later, their son John joins the business
  • 1998 – Three years later, he recognizes that there is a gap in the market for a wine brand that is easy to drink and delivers consistency (think coors here – he’s looking to find consistent quality, taste, value) THE BIRTH OF YELLOWTAIL & the merging with Deutsch
    • Deutsch had contacted the Australian Trade Commission letting them know they were interested in a bargain Aussie wine. Since very little Yellow tail is actually consumed in Australia and the majority of the Casellla family business was selling bulk grapes

THE PROCESS BEHIND YELLOWTAIL

  • Yellow Tail had to be easy to understand.
  • Deutsch, “The thinking was to create a certain level of simplicity. We wanted to give the consumers what they wanted”; “When a wine is under $10 most consumers don’t want to fight with it, they want something fruit forward, that’s ripe, delicious and soft on the palette”
  • A claim is that Yellow Tail removes the aspects of wine many people can find off-putting, like the tannins and acidity
  • “There is no question that the American consumer is locked into very fruit forward styles of wines. It’s in concert with people growing up drinking juice and Coke. Look at Starbucks, it is all about delivery maximum flavor in every sip”
  • The next step was the packaging
    • At the time, most wine was fairly traditional and hard to remember
    • Yellow tail chose to stand out with a bright yellow wallaby in the center of the label and neon colored bars to distinguish varietals
    • Initial testing showed mixed results and that people didn’t like the animal on it but they took the risk and it was a surefire homerun
    • “In 2001 you couldn’t find an animal on a bottle of wine, now you walk into a wine shop and its looks like the Bronx Zoo” (Critter Wine Phenomenon)

THE TIMELINE AFTER THAT 

  • 2001 – The first shipment of yellowtail wine leaves Aussie for the US
    • At this time, Australian wine was just beginning to be more popular on the American market especially when it came to bargain wines
    • Deutsch was looking to compete against a brand called Lindemanns
      • It was said that Australian wine at this price point tasted better than other regions
    • This is crazy – the initial plan was to sell over 25,000 cases in the first year but the actual sales amounted to over 1 million cases in 13 months. 
  • 2002 – 2.2 million cases
  • 2003 – Global sales reaches 5 million cases
  • 2004 – The Premium Cabernet Sauv (2003 vintage) is awarded the Jimmy Watson Memorial Trophy
    • In the same year Premium Shiraz (2003) is awarded the Stodard Trophy
  • 2006 – To keep up with the growth, the winery installs the fastest wine bottling line in the world capable of processing 36,000 bottles per hour
  • 2011 – At it’s ten year anniversary and is available in over 50 countries
  • 2013 – 1 billionth bottle of yellow tail is produced, estimating that 10 billion glasses of yellow tail have been enjoyed around the world
  • 2014 – 12.5 million cases are exported
  • 2015 – 8 million cases alone in the US
  • 2017 – FIrst wine brand to advertise in the US Super Bowl in 40 years reaching a target audience of 150 million viewers and is recognized as the 5th biggest wine brand by volume by the Drinks Business
  • 2018 – World’s Most Powerful Wine Brand in the Wine Intelligence Global Brand Power Index
  • 2020 – World volume reaches 14 million cases

SUCCESS OF YELLOWTAIL:

  • The Deutsch family attributes it to the 6 Ps “people, product, price, packaging, promotion, potential”

THE DEMISE OF AUSSIE WINE:

  • With the success of yellow tail came the copycats
  • With more Aussie budget wine on the market, the impression of the country’s product began to change
  • By 2005 the country had become a massive producer of cheap wine and its import percentage began to slip
  • In 2012, only 10% of the wine American imported came from Australia meaning a loss of half the country’s market share in just 7 years
  • In early 2010s, Barefoot surpassed Yellowtail as the largest wine brand in the US