Interview: Peter Deutsch On The Rise Of Josh CellarsMarch 21, 2016
Introduced in 2009, Deutsch Family Wine & Spirits’ Josh Cellars has been one of the fastest wine brands ever to reach 1-million-case territory, and it’s done so at a premium price point of $13-$19 a bottle. The California wine brand has been a game-changer for Deutsch, spearheading the company’s move into the so-called “low lux” tier of wines retailing from $10-$25, while reducing its reliance on Yellow Tail, its top brand, which has been fighting an increasingly uphill battle as consumers migrate to higher price brackets. SND associate editor Christina Jelski recently caught up with Deutsch Family CEO Peter Deutsch to find out what’s been driving Josh Cellars’ explosive growth, and to see where the brand is headed.
SND: What are the main factors behind Josh Cellars’ rise from 130,000 cases in 2012 to 980,000 cases last year?
Deutsch: There are several factors driving growth. First, domestic $10-$15 wines added more retail sales than any other price category in wine over the past year, up 13%. The suggested retail price for Josh Cellars Sauvignon Blanc and Chardonnay is $14.99, while the Legacy red blend, Merlot and Cabernet Sauvignon are $15.99 and the Pinot Noir is $18.99. Promoted prices tend to be a couple of dollars below that. People also increasingly care about where their brands come from and what they stand for, and Josh Cellars has a powerful story. The brand was founded by longtime Napa Valley vintner Joseph Carr as a genuine tribute to his dad, Josh. Josh was always active in his community, believing “we have to take care of each other.” As a soldier in the U.S. Army, a volunteer firefighter, and even mayor of his hometown, he passed on values that the brand continues to represent. Josh gives back, partnering with charities that support the military and first responders.
SND: What specific U.S. markets and demographics have been leading the way for the brand?
Deutsch: Growth has been broad-based. Josh Cellars is most highly developed on the Eastern seaboard, but markets in the West are now the fastest-growing. Ultimately, men and women over age 35 are spending more on wine than those under 35, and we draw heavily from that above-35 age range, but our focus groups have shown that Josh has strong appeal with a wide array of ages. As far as gender, our advertising is more focused on men, but we think our drinkers are about evenly split between men and women.
SND: Will we see anything new this year from Josh Cellars either in terms of innovation or marketing initiatives?
Deutsch: The brand has tremendous opportunity to premiumize. Consumers tell us it looks and drinks like a $25 wine. We’ve seeded some super-premium expressions of Josh Cellars Cabernet Sauvignon, and the initial results are encouraging. If those continue to do well, we’ll consider launching them nationally. We’re also exploring the gradual addition of some other items, but we have so much opportunity for distribution with the current items that we’re not in a hurry to expand.
Read the full interview with Peter Deutsch in Impact’s March issue.