The Casella Wines case (16)

Filippo and Maria Casella emigrated from Sicily (southern Italy) to New South Wales (southern Australia) in 1957. After a few years, they acquired a rural property near the township of Yenda to produce grapes for the local wineries.

In 1969, the family began producing their own wine. By 1971, they had already crushed 50 tons of grapes. And in 1995, John Casella, the middle son, took over company management.

Soon, John realized the hardship of competing with traditional Australian wineries and Italian and French wines.

So he decided to launch an alternative product: a fresh and light wine added with the flavor of other fruits and an appeal to de-stress. That is how the brand [yellow tail] was born.

In just a few years, sales soared. In addition to conquering the North American market (in 2018, 2019, and 2020, it was the most imported wine brand in the USA—around 7 million 9-liter boxes each year), the company sold the product to more than 50 countries.

This success was because of a set of measures that, according to Kim and Mauborgne, characterize a Blue Ocean Strategy, notably:

• originality: a sweet wine added with the flavor of other fruits;
• operational simplification: producing only two items – the white Chardonnay and the red Shiraz – in the same kind of bottle;
• easy to choose: product presentation without technical jargon and elitist appeals;
• striking brand: [yellow tail], unconventional and irreverent;
• labels and boxes: containing a curious and fun image of an x-rayed kangaroo with vibrant colors;
• affordable price: equal to twice that of a big bottle of wine popular, but much lower than classic ones;
• disclosure effort: associated with symbols of Australian culture and with low-cost campaigns;
• distribution: retailers’ involvement with information about the product, the owner’s family, and the supply of typical costumes from the Australian interior.

The result was the emergence of a new, immense, and profitable market where the company navigates without direct competitors: its Blue Ocean.

C. L. Eckhard, author of Pricing in Agribusiness: setting and managing prices for better sales margins.