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Deutsch Mounts Super Bowl Push Behind Yellow Tail, Looks To Expand Redemption Whiskey

December 20, 2016

Josh Cellars has led growth lately for Deutsch Family Wine & Spirits, but Australia’s Yellow Tail remains the company’s largest brand by far. A partnership with the Casella family, Yellow Tail ($6.99) ranks as the fifth-largest wine brand in the U.S. at 8 million cases, according to Impact Databank, and the top imported wine in the industry by a margin of more than 4.3 million cases. Recently though, struggles at the lower tiers of the Australian import segment have impacted the brand, which has shed more than half a million cases over the past two years. In an effort to reverse the tide, Deutsch is planning to turn up the volume on Yellow Tail’s marketing in a big way in the months ahead.

“Typically when brands in this category plateau, marketers begin to dump price and reduce their marketing budget,” says CEO Peter Deutsch. “We’re taking a contrarian approach. We’ve actually doubled down on the size of our marketing investment, and we’re excited to announce that we’ll be the first wine in 40 years to advertise during the Super Bowl, which airs next February. We want to remind consumers that wine can be fun, and can be enjoyed anywhere that beer can be enjoyed.”

Deutsch and Casella are also looking for ways to leverage the intriguing growth prospects for upscale Australian wines. (After years of decline, Australian wine’s shipment value to the U.S. grew 8% to $342 million in the 12 months through June, driven by premium offerings.) Deutsch recently relaunched Casella’s Peter Lehmann brand in the U.S., focusing on its core Clancy’s Red Blend ($16), which accounts for about half of the brand’s volume, as well as Portrait Shiraz and Portrait Cabernet Sauvignon ($19). “We’re excited about Peter Lehmann because that price segment of Australian wines is beginning to grow again,” says Peter. “Also, over the next few years we’ll begin to launch some very limited wines under the Casella brand name, which we’ll seed in various markets.”

Meanwhile, Deutsch has committed itself to scaling its spirits business, which Peter describes as “a pillar in our strategy.” Last year, the company acquired the Redemption whiskey brand, founded by industry veterans Dave Schmier and Michael Kanbar. Sourced from the MGP distillery in Indiana, Redemption’s core Rye, Bourbon and High Rye Bourbon retail around the $30 mark, and this summer Deutsch extended the range with an Aged Barrel Proof Collection of high-end whiskies positioned at $100 a bottle. “Few of our competitors have been able to get a deal done in this space—it’s been challenging,” Peter notes, referring to top wine and spirits players’ race to expand in craft whiskey via acquisition. “American craft rye and Bourbon are hot segments, and we’re very optimistic about Redemption. We spent our first year building stocks, but now supply has loosened up. We recently unveiled new packaging—including a proprietary bottle—which we think will be a big boost for the brand.” Other growing brands in Deutsch’s spirits portfolio include Luksusowa vodka and Licor 43. —Daniel Marsteller

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