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Makeover for Yellowglen in champagne fight

Date

Eli Greenblat

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Champagne growth remains robust.

Champagne growth remains robust. Photo: Quentin Jones

TREASURY Wine Estates will introduce new packaging and branding for its sparkling wine house Yellowglen to arrest softening sales, as a proliferation of locally produced sparkling wines and heavily discounted imported champagne tempts drinkers away from the 40-year-old label.

The renewed marketing push will be targeted at the important $10 to $15 price bracket and coupled with the release of a new premium range of Yellowglen wines that will sell for around $49 and attempt to match well-known champagne houses in terms of flavour and quality.

Michelle Terry, managing director of the Treasury Wine Estates division that overseas Yellowglen, said the changes to the well-known label's look followed a year-long review of the brand.

''We looked at the commercial performance, where we were strong, where we were not strong, the market structure, trends and what was happening with the Australian dollar, movement of French competitors into the market and then also domestic competitors,'' Ms Terry said on Tuesday.

The review found that Yellowglen, Australia's No. 1 sparkling with a 25 per cent market share, was dominant in the $8 to $10 price range but had ceded territory and customers to its rivals when it came to $10-plus.

''We had seen some softening in our position in the market in the teens … so it's important for us that, given that is a growing market, we re-establish our credibility in that part of the market as well as in a premium offering,'' Ms Terry said.

The refresh would include packaging changes to be introduced between now and Christmas and a marketing campaign in the new year.

Yellowglen has improved its performance within the Treasury Wine Estates portfolio, with its core brands returning to growth in 2011-12 and up 3 per cent in Australia/New Zealand for the period. But the sparkling wine category in Australia has been overshadowed by the booming champagne market, fuelled by the high Australian dollar that makes the imported French bubbly highly price competitive.

A global oversupply of champagne has seen the close-knit French champagne houses look for markets to soak up excess supply, also forcing prices at the shelf down and closer to the traditional price points for sparkling wine.

According to industry data, champagne growth remains robust, up 10.5 per cent in value terms and 14.1 per cent in volume for the year to June.

Import competition, namely champagne, was a threat at higher price points for sparkling wine, Ms Terry said. ''Sometimes we see consumers trading up [to champagne] and that's one of the reasons why we are firmly trying to establish Yellowglen as the premier house of sparkling from Australia in that territory as well.''

As part of an added premium offering, Yellowglen has launched a new label called ''XV'' (Exceptional Vintage), which will have a limited supply and retail at $49-$59 a bottle. The XV range will use quality parcels of fruit from vineyards around Australia.

6 comments so far

  • Foster's, and now its successor Treasury Wine Estates' response to falling sales is always a marketing program: not just Yellowglen but also VB. Never does it seem to furrow their brow to consider improving a pretty low quality product.

    Commenter
    Dr. Alexander
    Location
    Melbourne
    Date and time
    November 15, 2012, 6:00PM
    • Spot on Doc

      Yellowglen is insipid garbage they should improve it instead of putting different spots on the same old leopard.

      Teens drink champagne out my way (western sydney) the young bogan chicks drink gallons of it I think they think it gives them class

      Oh how ignorant they are

      Commenter
      Stanley Kubrick
      Location
      Sydney
      Date and time
      November 16, 2012, 9:50AM
  • so they actually admit that they target teens "'We had seen some softening in our position in the market in the teens" maybe instead of wrapping the alcohol and selling to teens with their new pretty packaging they should drop the price instead;-)

    Commenter
    Mik
    Location
    Melbourne
    Date and time
    November 15, 2012, 10:18PM
    • wow. what an unfortunate quote...

      "'We had seen some softening in our position in the market in the teens … so it's important for us that, given that is a growing market, we re-establish our credibility in that part of the market as well as in a premium offering,'' Ms Terry said.

      i cant wait for ACA or today tonight to get a hold of that one, take it out of context, and spin it into a story about champagne being pushed upon our vulnerable teens...

      BTW, its 'oversees'... not 'overseas'.

      Commenter
      Dave
      Location
      Brunswick
      Date and time
      November 15, 2012, 10:25PM
      • "Yellowglen has launched a new label called ''XV'' (Exceptional Vintage), which will have a limited supply and retail at $49-$59 a bottle. The XV range will use quality parcels of fruit from vineyards around Australia"

        Cant wait! there was a time (many years ago) that YG was quite a reasonable drop, how things have changed "parcels of fruit from around Australia" guess that means whatever stuff we can get our hands on cheap enough.to do the job.

        Commenter
        Jon
        Location
        Australia
        Date and time
        November 16, 2012, 8:33AM
        • I think when she says "in the teens" she means the 2010s being the teens, I'll give her the benefit of the doubt. But I agree, fundamentally, with the above posters; when wine falls into the hands of marketers it suffers as they don't fundamentally understand wine and wine drinkers & that's why the lack of success at TWE forced the separation from Fosters in the first place. People who purchase Yellowglen are buying on price & price only, you can't have it both ways with this brand. I'm sure when Michelle Terry moves on to selling toothpaste, or washing powder, or whatever her next gig is, the wine industry won't miss her & let's hope that she is replaced by someone who is a wine person.

          Commenter
          domP
          Location
          Balnarring
          Date and time
          November 17, 2012, 12:23AM

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