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Casella: A new world of wine and wallabies

When Filippo and Maria Casella began their new life in Australia they could not have envisaged "Casella" becoming a household name. Bruce Love finds out how the family's Yellowtail brand is already well on the way to reaching this milestone

When all you know about Australia has come from the popular press and tourism advertisements, you could be forgiven for thinking that the outback was all desert and red rock – a barren, isolated place uninhabited by all but a few solitary outposts of humanity and impervious to all but the most belligerent of vegetation. But 600km west of Sydney and 500km north of Melbourne lies a picturesque region that would make you reconsider.

If it wasn't for the characteristic blue haze on the horizon that emanates from the indigenous eucalyptus (gum tree) forests for which Australia is famous, this charming scene, known affectionately as the Riverina, could easily be mistaken for farmland located many places across Italy or other European countries.

Thick, verdant evergreens border lush grassy pastures. Nearby citrus orchards and olive groves perfume the air. There aren't as many hills and there's a strange assortment of wildlife, but the land is rich and fertile, with highly variable alluvial soils with sands and gravels embedded in clays. It's the perfect climate for many varietals of grape.

No doubt this was one of the thoughts going through their minds when Filippo and Maria Casella arrived in the region from Sicily in 1962 and settled.

Like many Italians of the time who immigrated to Australia, they were lured by the promise of work, land and a new life in the New World.

A new life down under
They came in response to a growing need for skilled labour for large-scale engineering projects, such as the Snowy Mountains Hydro Electric Scheme. Like America in the 19th Century, 1950s Australia was growing rapidly. More than 100,000 people from over thirty countries answered the call, with a large proportion of them coming from a post-war Italy where work was scarce.

"After the Second World War, many families in Sicily could not make ends meet. The Australian government assisted them in paying the fare to take the journey to Australia and work on the hydro electric scheme," says Filippo and Maria's son, John Casella, when I meet him at the London International Wine Fair. His exhibition stand, though one of hundreds in the cavernous exhibition centre, is easily identifiable by the iconic Australian wallaby that adorns his Yellowtail label.

On completion of their engineering contracts, many Italian families moved to the Riverina to build a life out of the rich alluvial planes. "My father worked the engineering projects before settling in the area. In the early years he cut sugar cane before saving up the money to buy his own farm."

The dream was always to run their own winery. Raised in the foothills of Mount Etna in Sicily, John's father and mother came from three generations of winemakers and growing wine was part of the local culture.

In the old country, there was a clear split between landowners and workers. Landowners worked their own grapes and then helped each other as the crops were due to be harvested. Filippo's dream was to replicate this lifestyle in the New World.

In 1965 he settled on a farm in the small town of Yenda, New South Wales where Casella Wines is still located to this day. For the first few years he sold the grapes from his farm to local wineries before deciding in 1969 to put its winemaking skills to use. Little did he know that from these modest beginnings would spring one of the most popular wine brands in the world.

Today, Australian industry wine exports are worth $2.8 billion and growing at a rate of 9% per annum, with the US and UK accounting for $2 billion annually. In North America, Australian wine is in stiff competition with local Californian brands as well as the ever-popular Italian labels. In the UK, French wines are still a formidable force. Australia has almost 2000 wine producers, most of whom are small family operations.

As Australians on the international stage, Casella competes with Penfolds, Wolf Blass, Rosemount and Lindemans from the Foster's stable, as well as Pernod Ricard Pacific's Richmond Grove Wines and Wyndham Estate and Jacobs Creek.

The wallaby brand
Launched in 2001, Casella's Yellowtail brand has made it into the history books as the most successful Australian wine launch of all time. Export sales have exceeded 12 million cases, and the Yellowtail Shiraz – which quickly became the most popular import wine in the US – is now that country's most popular red wine ever.

John says the key to the brand's outright success is that the wines have been tailored to the public's palate, with a view of keeping consistency from vintage to vintage: "If the quality is too low, no one would buy it. But if the quality is too high, you can't maintain the consistency in large volumes over a long period of time. That's the key to Yellowtail's success in each variety."

Even before the wines took off, John knew that he would not be able to maintain volume from the family's own vineyards, so the Yellowtails are blends, sourced from locations all around Australia to find the right varietals. The Chardonnays are sourced from approximately 300km away in Cowra and Orange, New South Wales, as well as the Adelaide Hills in South Australia.

Yellowtail's Shiraz grapes come from South Australia's McLaren Vale and Eden Valley, as well as the internationally famous Barossa Valley. The Riverina region's warm climate provides the backbone of most of the Yellowtailism with big, ripe concentrated fruit flavours. The fruit from Australia's cooler climate regions contributes crisp acidity, elegance and finesse.

The casellas take root
At the wine exhibition in London, surrounded by marketing men and representatives from centuries-old wineries in Bordeaux, Burgundy, and Champagne, John is quiet about the success of the company – deeply aware of the struggles that his family went through in the early days.

"There were times we didn't even know if we would have electricity the next day," says John. "Growing up, we were very happy children but we did without a lot of the finer things in life."

John speaks of a farm life of the type that many colonial settlers would have experienced on coming to Australia: a merciless, uncompromising climate; constant battles with the elements and the bank; the threat of drought and foreclosure permanently overhead. But this is interwoven with memories of an idyllic country upbringing.

He shows me an old black and white photo of him, his mother and two brothers, sitting on top of a truckload of grapes that are ready to go to the presses. Their faces are all smiles. There is a sense of nostalgia mixed with quiet pride in his voice as he explains his determination to keep the company in family hands.

"We are proud of the fact that this is a family-owned business and we have always fought to keep it that way. Many Australian wineries went through some tough years during the 1990s and we made sure that the business never fell into the hands of the bank or private equity."

On the road that led to the company's success, what John is most proud of is the family's ability to "go it alone" and manage their own destiny. The Riverina is home to many well-known Australian wineries, including the McWilliams and De Bortoli labels, but John says that he has never sought counsel or advice from his neighbours, preferring to tackle market conditions based on his company's own strengths, rather than the current industry opinion: "Best thing we've done is keep away from the other local wineries and gone our own path."

John believes that group dynamics in the wine industry are such that in times of crisis, a herd mentality can oftentimes take over winemakers, whether they be Australian, European or American.

He cites the late 1980s and early 1990s, when Australian growers went through some tough market conditions. In response to a perceived glut of grapes, certain state governments sponsored growers to pull out their vines. Over production and poor sales in the 1990s caused many wineries to cut back on production.

But even then, John had big plans for the business: "Our bank manager didn't put much hope in the company's plans. He thought they were too ambitious, especially given the conservative stance of the other local wineries at the time. But history has proved us right."

Indeed, the business is still 100% owned by the family and still run by the three brothers. All funds are put back into the family business to ensure a reinvestment strategy that is aimed at keeping the company as financially healthy as possible.

The company now employs around 450 people, with 320 working within the winery alone. The company recently installed five new presses, three centrifuges and over 60 million litres of storage capacity in a bid to plan for anticipated growth.

A full-bodied family firm
John backed up his longtime family experience by studying oenology at Australia's leading agriculture university – Charles Sturt University in nearby Wagga Wagga. During the 1980s, while helping out part time in the family business, he honed his skills in winemaking and winery management at Riverina Estate Wines.

He returned to the family business fulltime in 1994, preparing the company for its next growth stage. In the meantime, John's older brother Joe gained business experience in the insurance industry before returning to the fold around the same time.

And although the private company's turnover is in excess of $260 million, the brothers still put little faith in the idea of forming a board of directors, preferring to manage
operations between themselves.

John serves as the managing director, winemaker and family patriarch, while Joe takes care of Australian sales. Youngest brother Marcello is a director and the vineyard manager.

Joe's son Phillip has also joined the business as assistant winemaker and public relations executive. His daughter Rachelle works in graphic design and his youngest son Daniel helps out on a casual basis while he studies business at university.

The family itself is firmly part of the Riverina community. Rather than sending the children to school in Sydney or Melbourne, they attend local schools and John describes the family's lifestyle as unassuming, low profile – anything but "flashy".

He believes it is important for the next generation to keep "as grounded as possible and understand the value of hard work".

The family presently has no succession plans in place. His idea is to continue to educate the children into the family culture and to let them choose their own path. "My hope is that they will become responsible adults," he says.

Although the next generation have a lot of benefits that he and his brothers never had when they were growing up, he says, "we try to make them understand the value of the business".

He is keenly aware, however, what the result of such a dramatic increase in wealth can do to the next generation: "We don't want to leave them with problems."

Specifically, John is keen to keep the family unit together for as long as he can, focusing on maintaining the business as a profitable, responsible organisation under the control of the current generation.

"I want to keep the family together, focused on the business … it can be destructive when key family members want to buy out."

Proud of the fact that the Casellas have never had to relinquish any share of the business to private equity, John is adamant that there is no IPO in the future – at least the foreseeable future.

You get the feeling, however, that if he is not confident in the next generation stepping up to the plate, the family could well consider cashing out when the present generation are ready to retire. "It's all or nothing," says John.

After the wine show in London, John tells me that he is taking the family on vacation to the old country – to Sicily, the home that his parents left 60 years ago. Grapevine roots might not grow very deep, but it's clear that family roots run considerably deeper. 

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