Power Laws are of interest because of their practical consequences. For example, the 80:20 Rule (or Pareto Principle) is one example of a Power Law, which says that for many events, roughly 80% of the effects come from 20% of the causes.

Power Laws are considered to be universal, and so there is no reason why they should not exist in the wine industry. One of the more obvious places that we might expect to find them is in wine sales — there are likely to be a few wines that sell very well and lots of smaller sales. As I showed in the earlier post, this appears to be generally true for domestic wine production in the USA; and so it is of interest to see whether it also applies to imported wines.

**Yellow Tail and the Power Law**

Currently, the biggest-selling imported wine in the USA is Yellow Tail (from Casella Wines, in Australia), with more than 8 million cases shipped to the US per year. This would place it at no. 9 in the current

*Wine Business Monthly*top-30 list of wine companies in the USA. In July 2016,

*The Drinks Business*placed Yellow Tail at no. 6 in its list of the Top 10 biggest-selling wine brands in the world, based on sales in 2015.

Unfortunately, I do not have a list of the sales of imported wine in the USA for any of the most recent years. However, in a presentation at the U.S. Beverage Alcohol Forum, which is part of the Wine & Spirits Wholesalers of America annual convention, Mike Ginley provided the US sales data for the top 25 imported table-wine brands in 2012. So, I will use this dataset for the analysis.

As I noted for for the previous analysis, one special case of the Power Law is known as Zipf's Law, which refers to the "size" of each event relative to it's rank order of size. This is what we are looking at here. For each wine brand, the "size" is the number of cases of wine sold during 2012, and the brands are listed in rank order of their sizes (largest to smallest). The standard way to evaluate the Zipf pattern is to plot the data with both axes of the graph converted to logarithms. Under these circumstances, the data should form a straight line.

Here is the graph of the 2012 sales data for the top 25 imported wine brands. Only the best-selling wine is labeled.

As you can see, all of the data lie roughly along a straight line, and thus do indeed fit a Power Law. That is what we would expect.

However, it is worth noting here that all of the wine brands do fit the

**same**Power Law, including Yellow Tail. This is different from what we found for the domestic wines (where the no. 1 winery under-performed relative to the Power Law model). Indeed, the Power Law indicates that Yellow Tail actually sold 28%

**more**cases than would be expected from the sales of the other wine brands. So, in 2012 Yellow Tail slightly out-performed the expectation from the mathematical model, whereas E&J Gallo greatly under-performed the expectation in 2016.

It is also worth noting the presence in the 2012 top-25 list of some of the best-selling wines from 30 years earlier. The data for 1980 and 1981 are provided in an article from the

*New York Times*(Lambrusco rates high with U.S. consumers). The imported wine brands that have managed to hang on over the decades are: Riunite (no. 5 in 2012, but no. 1 back in 1980 & 1981), Folonari (12 now vs. 4 then), Bolla (18 vs. 3) and Cella (20 vs. 2). In 2012, these brands sold only 20-50% of their 1981 case sales, which is why they have dropped down the ranking.

Previous top-10 imported wine brands that have fallen by the wayside include: Zonin, Giacobazzi, Blue Nun, Mateus, Yago, and Lancers. Perhaps you remember some of them?