ivey
Yellow Tail
Yellow Tail is the leading imported wine in the US. Introduced in June of 2001 by Australian owned Casella Wines, Yellow Tail sold more than 8.5 million cases in 2008, which is more wine than the next three Australian brands combined. This success has attracted substantial competition. The issue for Casella is how to sustain Yellow Tail’s growth in the face of emerging competition on a limited ad budget.
Yellow Tail competes in the $11 billion dollar US wine industry, which is characterized by a high level of fragmentation and stiff competition. There are over 6,500 wine brands. E & J Gallo brands command an 18% share of the market and Constellation Wine brands have 13% share. No other brand has more than a 7% market share. These shares have been quite stable over time, with only Casella Wines exhibiting significant growth, which is attributable mainly to the success of Yellow Tail.
The wine industry has a ten-year average growth rate of 3.7%. This growth is associated with increased spending on advertising, from the $23 million in 1994 to the current $100 million. This expenditure is still below the $115 million spent in 1980.
Yellow Tail’s rise to the top of the imported wine category has been driven by its drinkability, low price ($7/ bottle), and easygoing image. Although it was not the first low-priced Australian wine to enter the market, it has been the most successful in presenting a value proposition: Yellow Tail is the great tasting wine that is an exceptional value. Testimony to its quality is the fact that much of the brand’s growth has been fueled by repeat purchase.
Consumer Segments
Demographic data based on research conducted by Mintel and Simmons Research are shown in Exhibit 1. In general, wine consumption increases with age, income, and educational level. Constellation Wines conducted an online survey of over 3,500 core consumers who had purchased wine costing at least $5 in the last three months. The
Yellow Tail is the leading imported wine in the US. Introduced in June of 2001 by Australian owned Casella Wines, Yellow Tail sold more than 8.5 million cases in 2008, which is more wine than the next three Australian brands combined. This success has attracted substantial competition. The issue for Casella is how to sustain Yellow Tail’s growth in the face of emerging competition on a limited ad budget.
Yellow Tail competes in the $11 billion dollar US wine industry, which is characterized by a high level of fragmentation and stiff competition. There are over 6,500 wine brands. E & J Gallo brands command an 18% share of the market and Constellation Wine brands have 13% share. No other brand has more than a 7% market share. These shares have been quite stable over time, with only Casella Wines exhibiting significant growth, which is attributable mainly to the success of Yellow Tail.
The wine industry has a ten-year average growth rate of 3.7%. This growth is associated with increased spending on advertising, from the $23 million in 1994 to the current $100 million. This expenditure is still below the $115 million spent in 1980.
Yellow Tail’s rise to the top of the imported wine category has been driven by its drinkability, low price ($7/ bottle), and easygoing image. Although it was not the first low-priced Australian wine to enter the market, it has been the most successful in presenting a value proposition: Yellow Tail is the great tasting wine that is an exceptional value. Testimony to its quality is the fact that much of the brand’s growth has been fueled by repeat purchase.
Consumer Segments
Demographic data based on research conducted by Mintel and Simmons Research are shown in Exhibit 1. In general, wine consumption increases with age, income, and educational level. Constellation Wines conducted an online survey of over 3,500 core consumers who had purchased wine costing at least $5 in the last three months. The