Dr. John F.O. Bilson, Director of the Illinois Institute of Technology’s Ph.D. Program of Finance, spoke at the South Pacific Business Conference last week about the success of Australia’s Yellow Tail wine company in the United States.
Yellow Tail, a product of Casella Wines Ltd., has grown in the last decade from a relatively unknown brand to a giant that, according to Bilson, “has enough surplus wine to buy a glass for every man, woman, and child on earth”.
According to Bilson, their secret lies in operating in a low-risk environment. By maintaining thorough crop insurance, seeking fixed-priced irrigation, using plastic corks, and pre-arranging U.S. and Australian currency exchanges to hedge against market fluctuations. The company is able to provide wine to their primary market, the United States for $7 to $8 per bottle retail.
Bilson maintains that the company’s biggest success lies in their minimalist marketing strategies in the U.S.
When the company decided in the late 1990’s to capitalize on the relatively unexplored business of exporting Australian wine to the U.S., they came here to poll Americans about their impression of Australia.
“What they found”, said Bilson, “was that while Americans like Australia, they don’t seem to know much about it other than it is home to beaches and Nicole Kidman.”
At the end of their research, their answer to “How do you let Americans know that Yellow Tail is an Australian wine?” was, simply, “Put a bloody kangaroo on it”.
The “bloody kangaroo” is just about the only thing on the wine’s label. The company does not advertise the producer, vintage, or region on their bottles, as they feel that American’s don’t know or care about the specifics of Australia’s regions.
The strategy has worked, and Yellow Tail is now the number one wine import in the United States.