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The Wall Street Journal Wine Columnists Carry the Biggest Stick of All

Saber rattling between Fred Franzia and Casella Wines, the company that produces Yellow Tail wine, was clicking along just fine until the unthinkable happened:  somebody with influence said Franzia’s new “Down Under” brand was actually good.

Consider for a moment that when the announcement of the new Aussie wine brand, officially called “Down Under by Crane Lake,” starting with just a chardonnay, was announced in mid-June and then with more feverish coverage in the first week of July, the response from Casella wines was tepid.  John Casella, managing director of Casella Wines, quoted in an Associated Press article that ran in the Modesto Bee on July 4th said, “A lot of brands compete with Yellow Tail and this will be another.”

Hardly a shot across the bow; the quote was more of a dismissive “go ahead, pal.”

Casella continued in the same article, “It’s not sustainable.” The article continues by paraphrasing and saying that Casella noted that Australia is experiencing a wine glut and its currency is recovering strength against the U.S. dollar after a sharp downturn.

Franzia, preemptively, had addressed this very issue in a June 17, 2009 article at winebusiness.com.  The article noted:

Asked if Bronco will be able to maintain such low pricing over time, Franzia responded, “I heard the same thing about Two Buck Chuck seven years ago.  If you choose to be competitive you make yourself competitive.  The facts are we are pricing it so the retailer can sell it at half the price of Yellow Tail if they want. We think it’s just as good as anything else that comes from Australia.”

So, what changed in the last two months in the public and quotable jousting between Fred Franzia and Casella Wines that has caused Casella Wines to sue Franzia for trademark infringement? What causes a brand that sells a reported 5 + million cases a year in the U.S. to go after an upstart brand that just launched, particularly when the lawsuit is fairly flimsy and, according to a statement issued by Casella Wines, they hope to, “resolve by mutual agreement?”

Well, a brand that undercuts the major competitions price by half is a good place to start, as is the public broadside that is Franzia’s media quotes where he says, “It’s time that the American consumer paid the correct price for Australian wine.  They’ve been overpaying for it.”

But, I would suggest that the more egregious happenstance in this new wine launch that assails an incumbent is the simple fact that somebody said it was good; and good, when combined with cheap and thrown into the blender with influence, yields danger—danger for Yellow Tail.

Dottie J. Gaither and John Brecher in their Wall Street Journal wine column, Tastings, noted in a July 31st article that:

One other wine stood out. In our notes we wrote: “Crisp with crackling acidity and good, lemony fruit.  Quite fruity, especially on the finish, with a summery mix of fruits like grapefruit and pineapple. Lovely, fresh wine.”

This quote, of course, is now being used by “Down Under by Crane Lake” in marketing materials.

I’m sure Casella would humor an entrant that was more bluster than siphoning sales, particularly if the Franzia label competed like any of the other dozens of brands that Franzia produces, steady, but not lightening in a bottle.  Not lightening in the bottle like the sales velocity of a “Two Buck Chuck,” for example.

So, the Casella lawsuit, likely, is a half-hearted speed bump thrown up to prevent capturing lightening in a bottle.  The easiest way to do that (perhaps the only way) is to go after trade dress—the label.

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But, a quick analysis of the respective labels yields, well, not much similarity and certainly not enough similarity to cause confusion to a customer.

In fact, in another article from the spring of this year, Yellow Tail has changed advertising agencies.  Mike Burns, a managing principal at the new agency, Burns Group, noted that the agency’s primary task would be to shift the brand’s marketing efforts from merely creating brand awareness, and to shift it to “brand affinity.”

If that’s the case, and if Yellow Tail merely has “brand awareness” is it likely that the Franzia label and the Yellow Tail label, both very different from each other, would cause confusion to the customer?

I think not. I think this is business as usual where lawsuits are used as a diversion tactic, and a blow to the kneecaps might stave off a tsunami of consumer success by Franzia, but that’s my opinion.  What do you think? 

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Secondarily, am I crazy in suggesting that the two labels are nowhere near being confusingly similar to each other for a wine shopper?

I’m not sure if I agree with Fred Franzia’s approach to business very often, and even the notion of selling wine that was purchased for pennies makes me blanch, but in this regard, I’m sure he’ll fight with his trademark (pun intended) gusto and with my support—to go alongside the recommendation of The Wall Street Journal, of course.



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Posted in, Good Grape Daily: Pomace & Lees. Permalink | Comments (15) |


Comments

On 08/18, Dennis Schaefer wrote:

I made the call on the success of this wine back on July 19; guess I was ahead of the curve. http://www.examiner.com/x-11305-Kansas-City-Wine-Examiner~y2009m7d19-After-Two-Buck-Chuck-Three-Dollar-Koala

Absolutely agree with your comments about the labels and the lawsuit. Really has no actionable grounds; more of a nuisance.

On 08/18, Dr. Horowitz wrote:

Brand awareness, brand equity, brand affinity, brand personality, bleh…

There will always be a new MBA euphemism.

What makes a brand meaningful?  Not a label, unless you fetishize koalas.

On 08/19, Hampers wrote:

Nice blog. Enjoyed going through it. Keep it up the good work.

On 08/19, Thomas Pellechia wrote:

Great discussion Hampers. Where do these yo-yos come from?

Anyway, everything Jeff said is spot on, in my opinion. But to address Doc Horowitz’s point, two points, actually:

1. Yes, the MBAspeak is grating, especially on a writer’s ears, as is most corporatespeak.

2. Having sold wine for quite some time, and unless something serious has changed with wine consumers, I’m sorry to sat that labels do make a brand meaningful—maybe not in the correct way, but meaningful nonetheless.

On 08/19, Thomas Pellechia wrote:

say—not sat!

On 08/19, .(JavaScript must be enabled to view this email address) wrote:

me thinks the suit to be frivolous. that is to say it will not do much more than bring added market awareness to the “Calistralian” (and that’s a trade mark description, ask me for permission to use it) product and help sales of this tiny bear in a bottle if by no other means than consumer curiosity. Fred did it again, it has cost him nothing and any reasonable judge in the land will throw the case out. too bad for yellow tail, though me thinks their sales may also be elevated if for only a minute.

On 08/19, .(JavaScript must be enabled to view this email address) wrote:

You won’t catch me crying for Yellow Tail, but I think that this new brand (at half the price) will ultimately (if commercially successful) be a blow for Australian wine in general. I think it will take the Aussie wine industry years to overcome the damage these cheap wine brands have done to its reputation. Americans already see Australia as one big GI and mostly synonomous with inexpensive generic wine. There are plenty of values from Australia that aren’t so generic and represent a sense of place… That’s where my money will be spent.

On 08/19, Dylan wrote:

I’ve said it before and I’ll say it again. The only confusion for this consumer is why there’s a suit to begin with. At least don’t claim that it’s for the sake of not confusing the consumer and be honest in your effort that it’s to protect your sales.

On 08/19, Ted wrote:

Why use the brackets other than to try and look like Yellow Tail?  I think Fred got the reaction he was looking for.

On 08/19, Jeff wrote:

Thanks for all of the comments and thanks for checking out the site.

Personally, I’ve never met a bottle of 2 Buck Chuck that I liked, but I do appreciate his brashness and willingness to brawl.

And, in fact, as i suggested, the combo of the WSJ review and the lawsuit will give me cause to plunk down $3 at Trader Joe’s to see what the juice is all about.

And onward we go ...

Thanks again,

Jeff

On 08/19, tom merle wrote:

Yup, the brackets are trademarked, which is the issue, not consumer confusion over look alike labels of the sort when Jess Jackson sued Gallo over the similarity of the Turning Leaf label to Vintners Reserve.  And yes Turning Leaf fell right into the trap. They could win the battle but lose the war.  Fred doesn’t need the brackets except as a device to tweak and then generate publicity for a new brand.

On 08/22, Tish wrote:

Tom Merle is [100%] correct. It’s all about the [brackets] and now publicity. It will be interesting to see if and how wine media cover this. I don’t envision much taking up of sides…

On 08/03, John Smith wrote:

When professors require students to subscribe to Wall Street Journal for student discounts, how much does the professor get in kickback from the Wall Street Journal?
        .

On 05/15, TN Pas Cher wrote:

om Merle is [100%] correct. It’s all about the [brackets] and now publicity. It will be interesting to see if and how

On 11/14, Watch Catching Fire Online Free wrote:

I was wondering if you ever thought of changing the layout
of your blog? Its very well written; I love what youve got to say.
But maybe you could a little more in the way of content so people could connect with it
better. Youve got an awful lot of text for only having 1 or two pictures.
Maybe you could space it out better?


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