Casella Wines boosts future beer interests with CCA Agreement

Casella Wines is pleased to today announce that it has signed an Agreement with Coca-Cola Amatil (CCA) with a view to the formation of a joint venture partnership in the future.

Under the terms of the Agreement a new entity will take over Casella’s current brewing operations after 16 December 2013, and from that time, the joint venture company, the Australian Beer Company, will be responsible for the brewing and marketing of the company’s beer products.

This vision to form a joint venture does not include Casella’s winery business which will remain 100% family-owned and operated by Casella.

Casella Wines’ Managing Director,John Casella, said the signing of the Agreement with CCA marks an exciting new chapter for Casella Wines and the company’s expansion into the beer category.

“Many synergies exist between the two companies, and the prospect of any future partnership with CCA would provide tremendous scope to develop our brewing operations faster and more broadly than we could do on our own,” John said.

“CCA’s distribution network and proven credentials in beer and marketing capabilities are unrivalled, as are our world-class facilities, precision in manufacturing, and ability to deliver quality products year on year.

“We’re confident that the strengths which both parties could bring to a partnership would be a winning combination and would deliver vast opportunities to further develop our brewing operations.

“Given we’re only in our infancy with regard to our beer brewing initiatives, CCA’s future participation in the joint venture is a great endorsement of our capacity to transfer our skills and knowledge of winemaking into brewing beer and our vision for the future.”

Coca-Cola Amatil’s Group Managing Director, Terry Davis, said: “This new agreement with Casella will give CCA the opportunity to access a world class, low cost brewery which will enable us to re-enter the premium beer market inAustraliaafter 16 December 2013 with sufficient initial manufacturing capacity to cater to approximately 15% of the premium beer market inAustralia.”

Note to editor:

Under the terms of agreement reached in connection with CCA’s sale of its share in Pacific Beverages, CCA is currently subject to a restraint not to sell, distribute or manufacture beer or cider in Australia until after December 16, 2013.

Comment

Fascinating news this morning that Casella Wines’ new brewing venture has signed an agreement to joint venture with Coca-Cola Amatil in the future.

Coca Cola has made no secret of its plans to re-enter the beer market as soon as its agreement not to sell, distribute or manufacture beer or cider inAustraliaends in December 2013 and given the capacity and quality of the Casella brewery it would have been an obvious target for negotiations. But it would be interesting to know how long this has been on the cards and whether it is a pragmatic business decision or represents an early sign from Casella that the beer market is proving a much harder nut to crack than the wine market.

It has been intriguing to watch the progress of Arvo beer since I was one of a large number of journalists invited to the brewery earlier this year. I was struck by how well resourced the brewery was, straight away it was apparent that this was a very, very serious play in the local beer market. As a visitor, you genuinely wished them well with the venture. The people involved are passionate for their project and seem genuinely excited by their opportunity and their product. From the market’s perspective having another major player would potentially be good through increased competition.

The beer offering was the thing that I found curious. The beers are well-made and there is absolutely nothing wrong with them and they will no doubt find favour with many as an alternative to their regular pale lager. Of course, that statement is as innocuous as the beer itself – both of them.

The beers are well made but also deeply uninteresting. I can’t help but think that if you’re going to launch a major new brand, you need to genuinely set yourself apart with your brand offering. Casella, due to its size is not interested in occupying niches. It has identified the difficulties in creating a large business based on distinctive flavour, as is being done in the craft sector. Instead it has gone for a beer with the broadest possible appeal: clean lager with little distinguishing flavour.

While talking about flavour and the difference between their two offerings, they offer very little between the two beers or between themselves and every other premium lager. With their ‘We Brewed. You Decide’ campaign, the choice that beer drinkers are being offered isn’t the difference between skiing or the beach. It’s not even Falls Creek or Threadbo, it is which shade of white do you want to paint your kitchen.

As a brand, it doesn’t set out to bring new drinkers to the category, it simply set out to be ‘an Australian’ premium beer option in the already cluttered premium and imported beer market. In this market, I really wonder how many care about that anyway, such is the howls of indignation if they can’t get their ‘genuine’ Heineken or Peroni.

Anyway, it keeps things interesting in the world of uninteresting beer. [MK]