Reaping The Rewards

Sun Herald

Sunday January 11, 2009

Winsor Dobbin

From humble beginnings, the Casella family has become a global force in the wine industry, writes Winsor Dobbin

John Casella remembers when times were tough - long before his family were multi-millionaires.

His father Filippo used to pack four barrels of home-made wine into the family's battered old Land Rover and drive from the Riverina to north Queensland, where he hoped to sell the rough red to Italian migrants in towns such as Mareeba and Tully.

Family members slept in the car in rest areas at the side of the road, often needing a wine sale to have enough money to put petrol in the vehicle.

"One day, 38 years ago, when I was 11 or so, we put 25 cents worth of petrol in, drove to a farm, sold a barrel of wine and got a cheque to cash at the local club," he recalls. "We had enough money to keep moving.

"That kind of experience makes you grounded, helps you become tougher."

John's brother Marcello remembers those drives taking two or three days, and being away from home for a couple of months at a time. "But it was fun to see the local farmers and old Italian friends getting pleasure from our wines," he says.

Today the Casella family sells more wine in the United States - 8.5million cases a year and rising - than all the producers in France combined.

Its Yellow Tail label is one of the top five wine brands globally and total sales are predicted to top 12million cases this year. To put that into perspective, leading Hunter Valley winery Tyrrell's produces about 500,000 cases annually and Brown Brothers makes 1.1million cases.

Yellow Tail was only unveiled in 2001 and has been an amazing success story. It is sold in more than 40 countries after the most successful launch of an Australian wine brand.

In 2008 the winery crushed 10 per cent of all grapes in Australia and accounts for more than 15 per cent of all Australian wine exports. Yet all the wines are still produced at the family's own facility at Yenda, a sleepy hamlet 15 kilometres outside Griffith in the Riverina.

Casella Wines is still very much a hands-on family business with John, 49, the managing director. His brother Joe is director of sales and Marcello is vineyard director. Joe's son Phillip is brand manager and part of the winemaking team while Joe's daughter Rachelle works for the company as a graphic designer.

While John and Marcello live in Griffith, Joe and his family still live within the ultra high-tech 48-hectare winery compound (a secure site because of the volume of exports to the US) and parents Filippo and Maria moved only recently from a tiny cottage in the shadows of the giant winery storage tanks to a new home overlooking the park.

Just a few hundred metres away is the fastest bottling line in the world - capable of processing 36,000 bottles an hour. It was installed to keep up with the demand for the Casellas' wines.

Despite their success, this is a family without airs and graces. Private jets, luxury cruises and three-hat Michelin restaurants are definitely not on their agenda.

John, 49, has treated himself to a Ferrari but it stays parked in his garage. He's driven it only twice and he takes the kids to school in his Holden. The family eats regularly at unpretentious Griffith Italian diner La Scala, while Phillip - one of Australia's most eligible bachelors - can be spotted driving around Sydney on a Vespa scooter but is rarely seen in the social pages.

"We are pretty much unchanged as a family," John Casella says. "It's not in our make-up to live a jet-set lifestyle and I also want to be a good example to my children - the last thing I want the children, or the community, to think is that we are different. We want to be very much part of the local community.

"I don't want to jet-set around the world, I'd rather be at home with my kids and my parents."

Six generations of the Casella family have grown grapes, dating back to 1820; first in Sicily, then in the Riverina.

A former prisoner of war, Filippo, who is now 87 and in ill-health, worked as an itinerant labourer around Griffith for five years to raise the cash to buy the land on which he and his wife Maria began growing grapes at Yenda in 1965. They started selling their own wine four years later but lived for many years as subsistence farmers.

"Times were tough but we were never unhappy," John says. "We just got on with life but when we were the only kids at school without new shoes we knew we were different."

Forbes.com lists Filippo Casella as the 27th richest person in Australia and New Zealand with assets of more than $US840 million.

The family's recent victory at the 2008 Ethnic Business Awards was a huge thrill for Filippo, who said: "It is great to see recognition of the valuable contribution that companies like ours are making to Australian business and the economy."

John says his parents are "proud of our success but more proud of the fact we are all working together, recognised and respected".

"If you've grown up without money, you aren't scared not to have money, so we've been prepared to take risks," he says.

"As bad as it seems, we got by then and we'd get by now."

John says he's used "intuition and trust in key people" to build a small label into a global brand.

"You need the capacity to grow and to choose the right people to succeed," he adds. "There is nothing wrong in producing a wine that people enjoy."

No one had heard of the family when they launched the Yellow Tail label in 2001 but it has been the greatest Australian wine export story, with more than 15 per cent of all Australian wine exports last year coming from the Casellas, who still own 100 per cent of the company.

The sudden success of Yellow Tail took everyone, even the family, by surprise. But American consumers fell in love with the "kangaroo" on the label - it is actually a yellow-footed rock wallaby - and the fruit-driven wines, which were similar in style to the family's unsuccessful Carramar Estate and Cottler's Bridge wines.

It also benefited from distribution problems suffered by leading Australian exporters to the US, including Rosemount Estate, at the same time as it first launched - and from an oversupply of grapes at the time, meaning it could make wines cheaply.

"In the first year we planned to send 25,000 cases to the US - we ended up sending over 500,000," John says. "It was just inconceivable. I always felt we might end up selling 100,000 cases a year, which would have been fantastic. That was the magic number. But the brand just took off and we sold 820,000 cases in the first year. We wanted a good solid business but got a lot more.

"We never refused an order and we were buying a lot of fruit. At first we didn't have enough money to pay our capsule suppliers, so we ... got capsules from another supplier. We struggled to pay for the cartons and the bottles. There just wasn't enough cash."

There was, however, a "can do" attitude, though John admits it took five years for the family to get on top of the finances involved - particularly the money needed to invest in stock and infrastructure.

"We never, ever, compromised on quality - we wouldn't sell something we weren't proud of," he says.

"People see us as offering value for money - and that's very important. There are a lot of wines that are cheaper, so it's not just about the price. It's about being consistent and reliable, and knowing your money is being well spent."

The company has a policy of avoiding winespeak. All its labels and press releases are written in plain English. One of their irreverent slogans is "Never Mind The &*}}*%!#, Here's The [Yellow Tail]".

The Casellas also try to be good corporate citizens, sponsoring everything from the local agricultural show to the neighbourhood Yoogali soccer team and a local art gallery.

They are committed environmentalists, with all rain and waste water at the winery recycled by the largest treatment plant in Australia. It is capable of recycling the equivalent of 160 Olympic-sized swimming pools each year.

Of course, they have their critics. The Yellow Tail brand has been criticised for being like Coca-Cola and McDonald's and for being identical vintage to vintage - although it has been supported by leading critics including American guru Robert Parker jnr.

While the budget Yellow Tail brand is the family's main focus, they also make wines under the Yendah Reserve and Yellow Tail limited-release labels,

The 2003 Yellow Tail Limited-Release Cabernet Sauvignon won the Jimmy Watson Trophy, Australia's best-known wine award, in 2004 but respect has proved elusive.

"It's hard to go up the pyramid," Phillip Casella admits. "Penfolds have done well coming down the pyramid [from Grange to Koonunga Hill and Rawsons Retreat] but it's hard to go the other way when you have a reputation for selling wines for under $10."

But Phillip has no doubts about the reasons for the family's success: "People want quality and consistency at a price they can afford to pay - and that's what we provide."

Chief winemaker Alan Kennett says: "The first bottle tastes the same as the 20millionth bottle - and a lot of consumers like that. There's lots of fruit flavour and the tannins are all balanced by residual sugar."

Which may explain why 43 per cent of all Australian wine sold in the US is under the Yellow Tail label and the wines are already No. 2 in the Australian market, behind Jacob's Creek, despite having only being launched domestically in 2004.

"I love our story because it shows what one family can achieve," John says. "Hopefully it is an inspirational story to others."

© 2009 Sun Herald

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