Lily Volpe, Yellow Tail

Lily Volpe’s dream is to own a car that’s equipped with a GPS navigation system. While driving from the White Plains, N.Y., train station to the nearby W.J. Deutsch & Sons’ headquarters in her humble Honda Accord, the brand manager explained, “I have notoriously the worst sense of direction. I would [sometimes] go out to get something to eat and wouldn’t be able to find my way back,” she said. “It was so embarrassing. I didn’t want people thinking I took a two-hour lunch!”

Fortunately for winemaker Yellow Tail, Volpe’s lack of navigational skills does not extend to her job. Volpe is, in fact, one of the best brand drivers in the business. In her six years at the company, she’s helped Yellow Tail find its way from the Casella family vineyards in the Riverina region of Australia into the wine glasses of millions of U.S. consumers. Six years ago, the brand didn’t exist. Today it’s the best-selling wine in America, behind Franzia’s bag-in-the-box wines and Carlo Rossi’s jug wines. This year Yellow Tail will easily eclipse 8 million cases sold in the U.S., making it the No. 1 imported wine, and three times larger than the runner-up import, Chile’s Concha y Toro.

Industry watchers agree that much of Yellow Tail’s success lies in its ability to package a very drinkable product at an attractive price and make it unpretentious, accessible, and fun—a genius stroke in a country where consumers are developing more sophisticated palettes, but are still intimidated by wine and how to select it.

It’s probably no coincidence that Volpe herself radiates the same kind of real-world unpretentiousness that’s driven her brand’s performance. “I hope you don’t mind that my car is a mess,” she said before picking up this reporter on a recent afternoon. And of the creeping crack marring the car’s windshield, Volpe said, “It’s not that bad yet. I haven’t had the time to fix it.”

It’s a valid excuse: Volpe’s known to put in 12-hour workdays. Attempting to describe her devotion to Yellow Tail, CEO William J. Deutsch described her as “passionate,” “enthusiastic,” with “a feel and sensitivity” and “in love with Yellow Tail. In 47 years, I have never seen a marketing person fall in love with a brand the way she has.” As her boss heaped on the praise during an interview, Volpe cringed, embarrassed by the adulation. Yet her words echoed his sentiment, “It’s such a feeling of having hit the lottery to be a part of this brand. I’m really motivated by that sense of responsibility to take good care of it.”

Volpe’s car was a fitting place to have a conversation about that responsibility. (This despite the fact she that didn’t actually own an automobile until she accepted the position as Yellow Tail’s brand manager.) Her car, you see, is the place where, she says, she gets most of her ideas. One of which drove this Australian import’s ascension into the top three players.

Color My World
It was an idea as simple as it is effective: color-coding the labels. Rather than expecting Americans to ask for, much less pronounce, the Shiraz-Grenache blend, they can simply ask for the pink one. This way, when average Joe consumer goes into the liquor store he can simply ask, “Where’s that kangaroo wine? My wife said to get the blue one.” All Yellow Tail wine bottles sport a simple belly band just below the neck. “Yellow Tail” is rendered in lower-case print, while the label color denotes the variety: buttery yellow for chardonnay, purple for pinot noir, blue for cabernet merlot, green for pinot grigio, and so on. Aside from the playful logo (more on that in a minute) below the label, there’s nothing else on the bottle.

Arthur Shapiro, a spirits industry veteran turned consultant at AM Shapiro and Associates, New York, said, “In a category that has its share of consumer fear factor, this is one brand that overcomes it. It’s for people who say, ‘I like wine. I like to have it with certain things. What the hell, this is easy. I’ll get the blue, pink and purple one, and I’m set.'”

“They took the act of choosing wine and made it less daunting,” said John Palumbo, CEO of the BigHeads Network, a marketing consultancy in New York. “Yellow Tail took a complicated category and made it accessible. It probably made the wine world cringe. I bet they turned their noses up and said ‘That brand would never last.'”

Volpe, 36, didn’t set out to make anyone squirm, or to shake the foundations of an industry once dominated by rows of monotone labels bearing French names in fancy script. Rather, she just applied her own experience. In fact, Yellow Tail fans have yogurt to thank. “I would go and buy yogurt every week,” Volpe said, recalling how annoyed she’d get because every fruit variety bore the same label: “You stick your hand in the freezer, and you pull out the yogurt. I can’t tell you how many times I brought home the wrong one.”

The color-coding system aside, another large part of Yellow Tail’s appeal is its wallaby logo.

(A smaller cousin to the kangaroo, the wallaby is often confused with it, though in Yellow Tail’s case the brand association is made either way). Developed by an Australian artist in Adelaide, the logo, drawn in the Aboriginal style, has become a true icon, and has spawned a veritable zoo of knockoffs from wine competitors.

Just like the color coding, the marsupial label lends itself to Volpe’s past experiences. At age 18, Volpe left her native Rochester, N.Y., “as quickly as I could,” and set out to put considerable distance between herself and her hometown. She moved to Chile to study during her senior year of college, eventually taking one job as a reporter, then another at the Australian Trade Commission, where she trafficked imports from Down Under into the coastal South American country. Vigorously schooled in all things Australian, Volpe got an offer to work for the ATC in New York. One might say she hopped to.

The Lily Volpe that Yellow Tail lured out of that job, then, was a rare combo: a marketer with a journalist’s sensibility, an importer’s business sense and an expatriate’s feel for how different cultures mesh. Volpe’s time in New York City added yet another facet to the mix: an appreciation for the power of outdoor advertising. Today, more than a third of Yellow Tail’s $24 million ad budget (the figure is based on the 18-month period ending in December) goes to billboards in the top 22 markets.

For Volpe, the playful irreverence so commonly associated with Australia remains central. True, striking Yellow Tail ads appear in places as pedestrian as phone kiosks. But the company also has a vintage prop plane, its tail painted a screaming yellow, that buzzes New York area beaches during the summer. Indeed, nearly anything with a yellow tail—a comet, a bird and, of course, a wallaby—has been fair game when it comes to the vintner’s creative. Deutsch recalls the ads were launched with the help of some “crazy creative guys with long hair” whom Volpe brought in from CramerKrasselt/Hampel Stefanides, New York. Early taglines such as “Now spotted outside of Australia” and “Have you spotted it?” referred directly to the yellow-tailed creatures, and created an awareness of both the Yellow Tail name and its Australian roots. This month, Volpe launched the newest slogan—”Tails, you win”—which appears alongside a yellow-tailed mermaid.

This latest motto marks a shift in strategy from raising awareness to building loyalty. “The brand is evolving,” said Volpe. ” ‘Have you spotted it?’ spoke to the whole word-of-mouth phenomenon Yellow Tail had. It was so much people telling other people about it. It was ‘Have you seen it? Are you in the know?’ But now with the brand as big as it is, it’s hard to ask ‘Have you spotted it?’ ” The brand has since added online and national radio ads, at Volpe’s behest. “Lily said we have to do it. So we did,” said Deutsch.

Volpe’s marketing approach also is just as significant for what it excludes. Under her tutelage, Yellow Tail has taken extreme pains to avoid the trappings of traditional (read: tired) wine advertising. There are no bottles of wine in the ads, no models holding glasses, swirling or sniffing what’s inside. As Deutsch put it: “We want something different.”

The brand also has sponsored Independent Film Channel programming, run national print and pushed out a ton of in-store material. In fact, its colorful boxes themselves play a part in the marketing mix because they’ve proven to be attractive when stacked. One store in Florida went so far as to create a mammoth 1,000-case display using the color spectrum of Yellow Tail boxes.

According to Palumbo, Yellow Tail’s strategy has worked exceptionally well. “They did a hell of a job branding it,” he said. “They are everywhere. They’ve marketed it more like a spirits brand. That’s separated it [within] the wine category. It was like what Johnnie Walker did with Scotch, you knew it was OK to buy it.”

Not only is the brand OK, it has developed fanatics. Volpe and Deutsch laughed when they brought up the pile of fan mail they received. Letters from people who have tattooed the logo on their bodies, named boats after it and even an undergrad confessing that in his frat house kegs have given way to cases of Yellow Tail.

According to Deutsch, it’s all evidence of Volpe’s ability to execute ideas. “I throw out an idea and then—boom. By the end of the day everything is developed.” To this tribute, Volpe replied modestly that she appreciates the fact that Deutsch “listens to me.”

Floor Show
Of course, no marketing strategy that’s taken an unknown wine to a top-three seller in six years is a simple thing. It’s a long, collaborative process. Deutsch and his star brand manager spend a great deal of time talking about what to do next. “The hall works both ways,” he said. “I go into her office and she comes up the hall into mine.”

That hallway has gotten a lot longer at this successful importer’s office. When Volpe started there were 25 employees. Now there are 150. Upon coming through the doors, she said, “Don’t let me forget to show you the seams of the carpet.” Each seam shows where the company has knocked down a wall to expand the premises into a former neighbor’s office. “Here’s one,” Volpe said, searching the floor for telltale stitching. “Oh wait, here’s another.” Total office expansions to date: four.

But where does it stop? So far Yellow Tail’s performance has mimicked the comet that appears in one of its ads. But Volpe knows that growth cannot be sustained indefinitely. “The big challenge we are constantly facing,” she said, “is how to stretch out the growth curve as long as possible.”

For now, sales are being fueled by new wine flavors, bottle sizes and the expanded ad campaign. But the comet analogy may prove all-too apt: They burn themselves out eventually, and that’s what worries some observers like Shapiro. “In the wine business there’s a ceiling that brands hit,” he said. “That’s why Yellow Tail’s growth has slowed down. It’s a combination of factors.” Yellow Tail is already vast, he said, and its very success has invited an onslaught of competitors. Not that Volpe and Deutsch aren’t aware of this. The CEO refers to competitors “shooting at us.”

But Frank Walters, director of research at beverage publication Impact, said, “Despite many knockoffs, they’re continuing to grow in a category that’s getting softer.” While Impact, which tracks alcohol sales, shows shipments are up only 3% on wine imports, Yellow Tail appears to be insulated. “They have consumer loyalty,” Walters said. “They built the franchise early.”

Flying Into the Sunset
And it’s the awareness of that loyalty that, if anything, is the main reason Volpe keeps at it. She confesses that, even after six years in the wine business, seeing Yellow Tail for sale in stores or available in restaurants (currently 15% of sales) still gives her a thrill. “I get such a kick out of that,” she said. “It’s been an amazing ride.”

At the end of the day Volpe hops back into the car with the cracked windshield to begin the 45-minute drive home. The commute, like much of the marketing Volpe has helped to create, is unorthodox: She bucks the tide by living in New York City but working in the suburbs. Pulling into her neighborhood in Queens, Volpe parks the car and settles into a well-earned night of trash television. At some point, she’ll pour herself a glass of wine.

Her favorite? The Yellow Tail Shiraz-Grenache blend. You know, the kangaroo wine—the pink one.

Photo by Chris Casaburi