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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. Impact 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.
•Viña Almaviva, the Chilean joint venture between Baron Philippe de Rothschild SA and Concha y Toro, has named Bordeaux negociants Twins and Joanne U.S. as its importers in the U.S. market. Describing the new partnerships as representing an evolution of the luxury Chilean brand’s business, Felipe Larrain, CEO of Almaviva, said the aim “is to grow the availability of Almaviva in targeted accounts across the U.S.” Almaviva was previously part of the former Diageo Chateau & Estate portfolio in the U.S. market.
•Bacardi USA has renewed its distribution alliance with Horizon Beverage in Massachusetts and Rhode Island, signing a multi-year pact with the New England wholesaler. Bacardi and Horizon have had a decades-long relationship. Earlier this year, Bacardi appointed the newly formed Southern Glazer’s as its exclusive distributor across most of the U.S. market, but Southern Glazer’s doesn’t operate in Massachusetts or Rhode Island, both of which are franchise states.
•Excelsior Wines, a partnership between Concha y Toro and Banfi Vintners, has struck a deal to become the official wine sponsor of the Dallas Cowboys in a three-year agreement beginning with the 2016 NFL season. Four leading Excelsior brands—Frontera, Casillero del Diablo, Serie Riberas Gran Reserva and Marques de Casa Concha—are included. Under the deal, Concha y Toro will develop related promotional packaging for the wines, which will also see exposure at Cowboys games, including branding, signage and a branded pouring station.
•Italy’s Falesco winery is adding to its U.S. offering with the launch of a new Tellus line of varietal wines. Falesco’s new Tellus tier includes Umbria IGP varietals Chardonnay, Merlot and Cabernet Sauvignon, all retailing at $16 a bottle. Based in Italy’s Lazio and Umbria regions, Falesco is imported by Leonardo LoCascio Selections, part of The Winebow Group.
•Texas craft producer Western Son Distillery tells SND its namesake vodka brand is projected to crest 60,000 cases this year—up from 20,000 cases in 2015—with an expanded distribution footprint including state launches in Florida, South Carolina, Georgia, Tennessee, Arkansas, Colorado, Kentucky, Indiana, New Jersey, and Massachusetts. The Western Son vodka lineup includes the core Texas Vodka, as well as Ruby Red Grapefruit, Peach, Blueberry, Cucumber and Prickly Pear flavors. Western Son, which also produces Brazos gin and the Red River and Blue Lacy whiskey brands, has a sales and marketing partnership with Atlanta’s Blue Ridge Spirits.
•Athens, Georgia’s Terrapin Beer Company is extending its year-round lineup with the launch of Sound Czech Pils. Originally part of its Georgia Theater Session Series from 2010, the Czech-style pilsner (5.2% abv) has been updated with a new recipe and 12-ounce canned format. It’s made with 100% pilsner malt and German Magnum, Czech Saaz and Saphire hops. Sound Czech is available throughout Terrapin’s distribution footprint in six-packs of cans and in half-barrel kegs.
•Marietta, Georgia-based Red Hare Brewing Company is releasing SPF 50/50, a blend of its Gangway IPA and a house-brewed grapefruit soda. Billed as an India Pale Radler, the new brew is at 4.2% abv, higher than traditional European radlers. It’s made with Falconer’s Flight, Chinook and Cascade hops. Red Hare SPF 50/50 will be available in cans and on draft beginning in April. Red Hare’s distribution footprint covers Georgia, South Carolina, Tennessee, Alabama and the Florida Panhandle.
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