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Deutsch Family Sees $9-$15 Wine Offerings Soar, Led By Josh Cellars, Barone Fini

November 25, 2014

Known for the 8.6-million-case Australian wine Yellow Tail, Deutsch Family Wine & Spirits is now seeing its best growth further up the pricing ladder, with brands positioned above the $10 mark.

“What’s interesting is that the $6-$9 category has been losing share, and the $9-$12 category is up aggressively—around 18%-19%—even though you still wouldn’t call this a strong economy,” Deutsch Family CEO Peter Deutsch tells SND. “I think part of the answer is that the big retailers are now prominently displaying $9-$13 bottles—like Josh Cellars, Ménage à Trois and Apothic—more than they have in the past.”

Impact “Hot Brand” Josh Cellars (around $13 a 750-ml.) continues to lead the way for Deutsch Family at the above-$10 level. It will finish 2014 at around 600,000 cases, Deutsch projects, up 80% from a year ago and exponentially from 2011, when it sold about 20,000 cases. Cabernet Sauvignon continues to account for roughly 70% of Josh Cellars’ volume, but the brand has also built out with Chardonnay, Sauvignon Blanc, Merlot, Pinot Noir and a red blend called Legacy. Looking ahead, Deutsch says Josh Cellars will offer a higher-priced Paso Robles-sourced wine, which will start as a Safeway exclusive in California before going national. The existing Josh wines are sourced from the North Coast and carry a California appellation.

Deutsch’s “Hot Prospect” import Barone Fini—focused on Pinot Grigio around the $13 mark—also continues to rise by double-digits, and is likely to crack the 100,000-case threshold this year. Premium sangria brand Eppa ($10) is likewise projected around 100,000 cases for 2014.

Yellow Tail, meanwhile, has been flat this year. “We’ve lost some volume in Chardonnay and Shiraz, but our innovations like Sweet Red Roo and Big Bold Red are filling the gap,” Deutsch notes, adding that the recent weakening of the Australian dollar has helped reduce the margin-pressure formerly plaguing Yellow Tail and other Aussie brands. Down the road, Deutsch expects to raise its profile at the premium tier of the Australian wine category with the addition of the Peter Lehmann Wines stable, which recently agreed to be acquired by Yellow Tail producer and Deutsch partner Casella Wines.


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