Casella Wines has hit record sales and volumes for 2020

More drinking at home and little exposure to China tariffs are giving Yellow Tail owner Casella Wines cause to celebrate.

John Casella at Casella Wines in Griffith. Picture: Dylan Robinson

Casella Wines, whose Yellow Tail label became the most popular imported wine in the US, has posted the biggest turnover and volumes in its 60-year history, as Covid-19 meant consumers drank more wine at home.

The family-owned, Griffith-based winery has enjoyed increased popularity both in its key market of the US and in Australia, where its Yellow Tail brand is the second most popular wine in the under-$10 a bottle category.

Meanwhile its tiny exposure to China has meant the crippling tariffs imposed by Beijing in an escalating trade war with Australia won’t impact its growth.

The winemaker is also now pushing out from its traditional activities to soon launch a whiskey, which is being produced and sold through its Morris of Rutherglen business.

But the bulk of its business remains in wine, through the Casella brands as well as its other businesses Brand’s Laira, Peter Lehmann, Baileys of Glenrowan and Morris.

The Casella group reported record sales in fiscal 2020.

The latest financial documents lodged with the corporate regulator show Casella Wines posted revenue of $518.38 million for the 2020 financial year, up from $491.035m in 2019. This sales boom translated into a much higher bottom line with profit hitting $48.75m, up from $33.73m in 2019, a gain of 44.5 per cent.

Founded by Maria Casella and her husband Filippo, who migrated from Italy in 1957, the nation’s largest family-run winemaker is now owned by their sons.

The 2020 accounts show Casella paid its owner shareholders a fully franked dividend of $147 per share, amounting to $8.34m, up from $7.77m in 2019.

Managing director John Casella told The Australian that despite the emergence of Covid-19 last year, the business had posted a record performance.

“It has been our biggest year ever in terms of volumes and turnover, we have had fairly strong growth in the UK as well as a fairly big uptick in sales in the US with the Covid-19 epidemic people were drinking at home rather than out at bars and restaurants,” he said.

“So the on-premise brands collapsed but the safe bet of off-premise brands made fairly big gains, Yellow Tail included.”

Pallets of wine stacked in a warehouse at the Casella winery at Griffith. Picture: Dylan Robinson

The Griffith-based winemaker was recently valued at around $1.5bn. The Yellow Tail brand emerged after the Sydney Olympics to quickly become the biggest imported wine in the US and in 2013 the billionth bottle of Yellow Tail was pumped out of its production facility.

Under Mr Casella’s leadership Casella has broadened its wine portfolio to take in more brands, paying $60m for Barossa winery Peter Lehmann Wines in 2014, followed by the purchase of Coonawarra’s Brand’s Laira and Morris Wines portfolio of fortified wines in Victoria’s Rutherglen region. It also inked a beer joint venture with Coca-Cola 10 years ago.

Its key markets have always been the US, UK and Australia, with only around 3 per cent of its business exposed to China, meaning it does not expect to suffer from the 200 per cent-plus tariffs imposed on Australian wine recently.

“It only represented about 3 per cent of our turnover and there was nothing there, obviously we would have preferred to do business and build our relationship with Chinese consumers but it is beyond us and we have to accept what it is.”

Mr Casella said Casella Wines was continuing to innovate and its Morris brand would release a whiskey later this week.

“Totally new to us but not totally foreign, we are finishing the whiskey in Morris oak fortified vats, we are producing the wash (a whiskey production process) in our joint facility with Coca-Cola and using the same still that the Morris family has had since the 1940s.”

Originally published as Casella Wines has hit record sales and volumes for 2020