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Interview: Sandra LeDrew, President-Americas, Treasury Wine Estates

December 16, 2015

In early October, Treasury Wine Estates (TWE) took a giant step in its ongoing revitalization by agreeing to acquire most of Diageo’s wine interests, including Beaulieu, Sterling, Provenance, Rosenblum, Acacia, Hewitt and Blossom Hill, for $600 million. That deal followed TWE’s announcement of its full-year results in August, which reflected a stunning turnaround for the company. In Part 1 of this interview with TWE president-Americas Sandra LeDrew, SND executive editor David Fleming discusses the Diageo deal, as well as the company’s initiatives with its Australian and New Zealand brands.

SND: What does the Diageo deal do for TWE, specifically in the U.S. market?

LeDrew: Our mission in the U.S. is to reshape the portfolio above $10 and build powerhouse brands in the Luxury ($20+) and Masstige ($10-$20) segments, while still growing our Priority Commercial brands. Adding the Diageo portfolio allows us to do just that—doubling the size of our business at those (first two) tiers. Diageo’s strength in Luxury and Masstige Cabernet Sauvignon and Pinot Noir complements our portfolio, and it also provides additional supply for those two very fast-growing varietal segments. We’ll now become twice as large as our nearest competitor in some critically important Napa Valley sub-AVAs including Rutherford, St. Helena, Oakville, Calistoga and Carneros. The deal also positions us as the number-one supplier of luxury Cabernet, and moves us from number-six in the above-$10 tiers to number-four. We remain number-two in (overall) Luxury, and we’ll now be number-three in Cabernet Sauvignon and Pinot Noir at $10 and above.

SND: How do you see Treasury’s role in recapturing the magic for Australian wine?

LeDrew: We’re here to build brands, not categories. We launched 19 Crimes ($12-$13), about two years ago, targeting male millennials, with a story about convicts who were shipped from Europe to Australia. The brand has now reached 200,000 cases, and we recently launched a Cabernet that should do 100,000 cases within 18 months. Next spring, we’ll roll out The Warden, a premium extension. Another interesting brand is Pepperjack ($24), Australia’s number-one on-premise wine. Reds are popular right now, so we’ve released it in the U.S. with an on-premise focus against steakhouses.

SND: The marketing for Penfolds has been recalibrated in a major way. Can you talk about some of those changes?

LeDrew: On the Penfolds Bins, we’re focusing on five specific expressions: Bin 8 Cabernet-Shiraz ($24); Bin 9 Cabernet Sauvignon ($24); Bin 28 Shiraz ($30); Bin 389 Cabernet-Shiraz ($65); and Bin 407 Cabernet Sauvignon ($65), in addition to Bin 707 ($500) and Grange ($850). All the other Bins are still in the market, but our program is built around those upscale reds. To demystify things, we have a campaign called “The Numbers Can Be Extraordinary,” now in its second year, which tells a story about each of the five Bin numbers. Next summer we’ll release a new Penfolds label called Max’s ($24), which will speak to the heritage of Grange creator Max Schubert, with some very special packaging.

SND: Lindemans seemed almost forgotten for a time. What’s the latest?

LeDrew: That was true to some extent, though we like to note that Lindemans Bin 65 Chardonnay is a 16-time winner of Wine Spectator’s Best Buy award. Over the past year, we’ve upgraded the packaging and tied in with HGTV, the home and garden cable channel, around its Spring House programming. We’ve also introduced The Gentleman’s Collection ($17), which taps into Millennial males at an age when they wonder how to act in certain situations. That label launched in August, and shipped out of its first run. It’s all about hand-crafted, masculine appeal.

SND: Your New Zealand wine brand, Matua, has been a very strong growth brand in recent years. How have you helped it along?

LeDrew: We reworked Matua’s packaging a few years ago, and it’s been on fire, up 40%-50% year-to-date. We tie it in with sports arenas, which create great sampling opportunities. We’ve been with the Boston Red Sox for a couple of years, and we’re linking with the Colorado Rockies and Texas Rangers. We expect Matua to be an Impact “Hot Brand” for some time to come. We’re projecting this brand to hit a million cases.

For the full interview see Impact’s December 1&15 issue.

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