Treasury’s Turnaround Continues, As Americas Sales Jump 10%August 17, 2017
Treasury Wine Estates continues to make strides in the U.S. market, with sales in its Americas region rising 10% to A$1.1 billion ($872m) in the 12 months through June, representing the company’s full fiscal year.
Treasury Americas’ volume was up 3% to 15.5 million cases during the period, with the increase boosted by the group’s acquisition of Diageo’s wine business in late 2015, partially offset by the sale of a number of non-priority commercial brands last summer. TWE noted that its Americas depletions growth was about 100,000 cases ahead of shipments for the year. Meanwhile, TWE Americas’ EBITS surged 51% to A$189 million ($150m).
In an interview with SND, Treasury CEO Michael Clarke said that Australian label 19 Crimes was the star performer in the U.S. for the year, with growth of about 150%. An Impact “Hot Brand,” 19 Crimes doubled to a half-million cases in the U.S. in 2016, and is continuing to surge in the $10-$20 segment. It’s projected to surpass 1 million cases stateside this year. “We’re also doing well in sales of our luxury portfolio with Stags’ Leap and top-end Beringer, not only in supermarkets and liquor stores but also direct-to-consumer,” Clarke added.
Much of Treasury’s focus in its new fiscal year will be devoted to bolstering its California portfolio, including brands like Beaulieu, Sterling and Chateau St. Jean. “In the first half of last year we lost some availability of those brands as we changed the labels and took pricing. Now it’s about rebuilding availability in the market. That’s the number-one thing we have to do with our U.S. portfolio,” Clarke said. Other initiatives for the current fiscal year include new campaigns across the California lineup, complemented by continued growth for 19 Crimes and the launch of new labels like Penfolds Max’s from Australia and Maison de Grand Esprit from France.
With growth ongoing, TWE recently announced a pending leadership change in the Americas. On January 1, the company’s current president and managing director for Asia and Europe, Robert Foye, will become global COO and president, Americas. Current Americas president Bob Spooner will become general manager, global strategic initiatives, systems and processes, reporting directly to Clarke.
While TWE continues to gain momentum in the U.S., its global business is also on the upswing. Globally, the company posted an 11% revenue increase for the fiscal year to A$2.4 billion ($1.9b), as EBITS rose 43% to $455 million ($360m). TWE’s Europe (sales up 14%) and Asia (+35%) units also prospered during the fiscal year, while its Australia and New Zealand business was roughly flat.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.