Following Friday's class,
I did some more research into Yellow Tail and how the brand achieved such
widespread success in the US markets.
I learned that Yellow Tail
is the brainchild of Deutsch Family Wine and
Spirits, which has introduced and marketed a number of successful wine brands
in the US. The company enjoyed tremendous success in the US with the French
Beaujolais label 'Georges Duboeuf', but the Duboeuf brand became over-exposed
in the late '90s and demand began to decline. Looking for the next big thing in
the $10 price range, Deutsch Family Wine and Spirits determined that,
"at this price level consumers are looking for a wine that was extremely
ripe in flavor, fruit forward, with very easy to no tannins and a pleasant
finish. We couldn’t generate this kind of wine at the sub $10 price level
out of France, so we decided to look to Australia".
Australia
Offers Best Bang For Your Buck (in ~$6 category): According to Deutsch Family Wine
and Spirits, sourcing grapes from Australia allows them to create best
bottle of wine in the US market for six bucks.
Time was Ripe for Australian Wines in
the US: Yellow Tail
launched their product in the early 2000s, which was a time when Australia
began to develop an international reputation for its Shiraz.
Flavor
Designed for US Palate:
Yellow Tail was designed specifically for the US market and caters to Americans
through its simple, fruity flavor profile. According to the company, “we
wanted to give the US consumers what they wanted". While the company won’t
admit it, some claim that Yellow Tail tampers with their wine to
remove certain aspects like tannins and acidity that many people can find
less appealing.
Label
Designed for US Preferences: Yellow Tail decided to take a risk and go forward with the
bright yellow kangaroo label because it was completely different from
everything else on American shelves. The label evokes the Aussie stereotype of
a carefree, laid back lifestyle, which is appealing to American customers.
Today, Yellow Tail is the
second best selling wine brand in the US (it recently lost the first position to Barefoot wines) and sells
8 million cases in the US annually. While Yellow Tail might not be the
wine-of-choice for GSBers, it’s still an interesting case study on how to build
and market a successful wine brand for the mass US market.
Sources: http://vinepair.com/wine-blog/how-yellow-tail-gave-america-australian-wine/ ,
I love this whole story and they are marketing geniuses! As is the case when any product finds great success, lots of copycats and competitors entered the market after Yellow Tail. By 2010 sales growth was leveling out at around $8.3 million. They then capitalized on their well-known brand through a marketing campaign for the "go to" wine in any occasion. You've probably seen the peppy ads with bright colors and the tag line, "Never the wrong time for the right wine." This continued the brand's accessibility while also allowing the expansion into more than just a single red and single white.
ReplyDeleteHere's a link to one of the more egregious competitors' (Bronco, which also manufactures Two Buck Chuck) labels, which Casella sued for infringement on the basis that the bracket and animal design is a knock-off of the distinctive Yellow Tail look.
ReplyDeletehttp://www.winebusiness.com/content/image/wb/downunder(1).jpg
The original label apparently featured a wallaby (closely related to a kangaroo), not a koala; the suit also claimed that "Casella grows most of its own grapes and purchases grapes and grape juice at normal market prices, Bronco often buys excess wine from wineries at steep discounts and sells it as its own" (http://www.law360.com/articles/116582/two-buck-chuck-maker-hit-with-trademark-suit). If you look at their labels now, Bronco has replaced the brackets with quotation marks and claims that its shiraz got an 87 from Wine Connection's 2012 reviews (http://classicwinesofcalifornia.com/downundercellars.html). Delish.
Jeff
Thanks for sharing, Elizabeth. I find the case study of Georges Duboeuf a particularly interesting comparison to the Yellow Tail brand. I wonder if the over-exposure of Yellow Tail will cause the ultimate decline of this brand also. One of the key reasons I don't purchase Yellow Tail is due to its level of awareness as a lower end brand. I'm not above drinking Yellow Tail. I purchase wines in the same price category. Despite this, I would rather bring a lesser known bottle of $10 wine to a dinner party or to serve to guests in my home. I dislike that everyone knows the price and the brand. Similar to our discussion on the wine critic, I think consumers also enjoy discovering new wines for their friends. With the level of brand awareness that Yellow Tail enjoys, there lacks this discovery experience. This further causes me to dislike purchasing Yellow Tail and may lead others to think that the brand is over-exposed over time.
ReplyDeleteThanks for sharing, Elizabeth. I find the case study of Georges Duboeuf a particularly interesting comparison to the Yellow Tail brand. I wonder if the over-exposure of Yellow Tail will cause the ultimate decline of this brand also. One of the key reasons I don't purchase Yellow Tail is due to its level of awareness as a lower end brand. I'm not above drinking Yellow Tail. I purchase wines in the same price category. Despite this, I would rather bring a lesser known bottle of $10 wine to a dinner party or to serve to guests in my home. I dislike that everyone knows the price and the brand. Similar to our discussion on the wine critic, I think consumers also enjoy discovering new wines for their friends. With the level of brand awareness that Yellow Tail enjoys, there lacks this discovery experience. This further causes me to dislike purchasing Yellow Tail and may lead others to think that the brand is over-exposed over time.
ReplyDeleteThis is an incredible story, particularly that they thought about the tastes of their consumer at the $6 price point. I think this is why cheap wines imported from the Old World often don't do well: Americans tend to like everything sweeter than Europeans, from bread to pastry to wine. Yellow Tail seems to have understood this flavor preference, hence why their marketing took off.
ReplyDeleteThis is an incredible story, particularly that they thought about the tastes of their consumer at the $6 price point. I think this is why cheap wines imported from the Old World often don't do well: Americans tend to like everything sweeter than Europeans, from bread to pastry to wine. Yellow Tail seems to have understood this flavor preference, hence why their marketing took off.
ReplyDeleteThis is an incredible story, particularly that they thought about the tastes of their consumer at the $6 price point. I think this is why cheap wines imported from the Old World often don't do well: Americans tend to like everything sweeter than Europeans, from bread to pastry to wine. Yellow Tail seems to have understood this flavor preference, hence why their marketing took off.
ReplyDeleteGreat post! Interestingly enough, Casella Wines, the family-owned wine company behind Yellow Tail, moved into the beer market in Australia in 2012. They created a new beer Arvo which was made at a specially built brewery at the family site in New South Wales (right next to Yellow Tail production facility), which has the capacity to pump out 300,000 hectolitres, or about 50,000 cartons. According to thedrinksbusiness.com, the move was seen in Australia as the first significant threat to the foreign-owned brewers that control 90% of the Australian beer market – Lion Nathan owned by the Japanese conglomerate Kirin and Foster’s owned by the London-based SABMiller. Casella opted to focus on the premium beer segment that, over the past few years, has had far stronger growth rates than standard beer. Arvo beer, produced in six packs and slabs of 24, sells for between AU$44.99 and AU$49 a box and there is already a deal in place to sell its Arvo brand to supermarket chain Woolworths. While they originally stated no interest in tackling the beer export market, I wonder if eventually they'll see the same opportunity in the US that they once saw with YellowTail.
ReplyDelete