Could Yellowtail ales be Blue Ocean brews?

Reads 1136 • Replies 4 • Started Tuesday, February 15, 2011 11:07:27 PM CT

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Samma
beers 1000 º places 59 º 23:07 Tue 2/15/2011

Hugely successful Aussie winemaker Casella (of Yellowtail fame - they sell >25 million cases into the US annually) have just advertised for a head brewer. I’m curious as to what prospect there is for them to make any headway into the US beer market.

Here’s a blogpost of mine. Feel free to pick it apart (I’m keen on some insight from industry insiders):

http://internationalbs.wordpress.com/2011/02/16/could-yellowtail-ales-be-blue-ocean-brews/

 
wavers1
beers 916 º places 42 º 23:42 Tue 2/15/2011

well, you’ll get a tiny bit of insight from industry insiders here, but a shitload more of overly critical and opinionated insight from other random members.

that said, they have little to no real prospect of making it big in the us beer market for the most part. they will get a couple large shipments in that will sit on store shelves collecting dust in the states for years and will be generally dismissed by the american craft brew community.

 
brewtopian
beers 2 º 14:20 Wed 2/23/2011

I would say that they have a pretty good shot at making some impact on the American market. I don’t think they can have the same sort of impact on craft beer that they’ve had with wine but I would have said the same thing about their chances with wine when it first hit the shores.

I would say their best shot at finding a place in the US market is to target conversions of mainstream beer drinkers to entry level craft drinkers. These are the Bud/Miller/Coors/import lager drinkers that are moving into a Fat Tire, Sam Adams, Widmer, Saranac product line. Good packaging, approachable beers and a good price point will win them a lot of space in the fridge of this demographic.

The other thing that gives them a huge head start in the market is they are already major players with distributors in every market in the country and have established supply chains and relationships with buyers for the major supermarkets and C stores. They unlike a typical start up craft brewery can have a regional or even national impact almost over night.

 
NobleSquirrel
beers 3437 º places 209 º 15:18 Wed 2/23/2011

Originally posted by brewtopian
I would say that they have a pretty good shot at making some impact on the American market. I don’t think they can have the same sort of impact on craft beer that they’ve had with wine but I would have said the same thing about their chances with wine when it first hit the shores.

I would say their best shot at finding a place in the US market is to target conversions of mainstream beer drinkers to entry level craft drinkers. These are the Bud/Miller/Coors/import lager drinkers that are moving into a Fat Tire, Sam Adams, Widmer, Saranac product line. Good packaging, approachable beers and a good price point will win them a lot of space in the fridge of this demographic.

The other thing that gives them a huge head start in the market is they are already major players with distributors in every market in the country and have established supply chains and relationships with buyers for the major supermarkets and C stores. They unlike a typical start up craft brewery can have a regional or even national impact almost over night.


I’ll kindly disagree mostly because of two things. 1. most people who drink craft beer see some sort of correlation between price and quality (whether it is actually true or not, call it analogous to the "rare tasting" quality). If people see a cheap craft beer, they probably aren’t going to give it much respect. 2. I would be very surprised if they could approach the economy of scale for brewing that they would need and be able to find a way to mitigate the shipping costs. One other thing, I’m not sure that people who start drinking craft beer necessarily "settle into" particular brands in the same way that people can go to a convenience store and pick up a bottle of cheap wine. At the end of the day, Yellowtail is far closer to Foster’s than Little Creatures in terms of wine...

 
brewtopian
beers 2 º 15:37 Wed 2/23/2011

Noble Squirrel, every craft beer drinker had a gateway beer, a beer that was the first round in developing their taste and buying habits for future growth and maturity of palette. Mine was Sierra Nevada Pale Ale. For others its Sam Adams, Fat Tire, Widmer Hef or Blue Moon. That person looking to try something new that is used to buying that 18 pk of Coors Light cans for $7.99 are looking for an inexpensive entry point so they can reduce their risk. We all start somewhere and price point is a big factor in that decision early on. The established craft beer drinker may not give it much respect but that doesn’t have to be their target just as the established wine drinker was not their target when they entered this market with that product.

As for economy of scale, these guys have the capital and the distribution channel to produce as much beer as they want and get it to market in every market in this country, parts of Europe, Australia, NZ and wherever else they currently distribute. The value of their distribution chain can not be underestimated. On top of that they have margin in their wine sales that can be used to offset the cost production and lower their price to be more competitive.