Case Name :      The Deutsch-Casella Joint Venture and [Yellow Tail]® Wines: Trading Up or Trading Down?

Authors :           Armand Gilinsky Jr., Raymond H. Lopez

Source :             North American Case Research Association (NACRA)

Case ID :            NA0302

Discipline :        Strategy

Case Length :    23 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In early February 2009, executives from a U.S. wine importer, W. J. Deutsch & Sons (Deutsch), met in White Plains, New York, to try and reach a consensus on how to respond to changes in the marketplace. Wine consumers had begun purchasing less expensive wines, or “trading down,” amidst a global recession in 2008-2009, reversing a five-year “trading up” trend. Inventories ballooned in the wine industry supply chain. Some producers and importers, unable to sell stocks, went into default. After an initial failure in the late 1990s to create an import brand with Casella Wines in Australia, Deutsch found success with the [ yellow tail ] brand – the number one Australian wine export and U.S. import from 2003-2008. John Casella, Managing Director of Casella Wines, suggested repositioning the [ yellow tail ] brand, priced at $4.99 – $5.99 per 750ml bottle, while Deutsch’s founder, Bill Deutsch, and his son, Peter (CEO), could not agree on a strategy.