Treasury Wine’s Reshaped Americas Business Drives Luxury Growth
February 16, 2022Treasury Wine Estates’ strategy to revamp and premiumize its Americas unit appears to be bearing fruit. Treasury Americas saw net sales revenue increase 13.6% on an organic basis to A$466 million ($333m) in its fiscal first half through December, while EBITS surged 46% to A$85 million ($61m). Volume was down 5.5% to 4 million cases on an organic basis, as the company continues to accentuate its premium and luxury labels and battle tougher conditions in the $8-$11 tier.
After offloading a number of non-priority assets—including Provenance and Chateau St. Jean—and acquiring Napa Valley’s Frank Family Vineyards for $315 million in November, Treasury Americas now derives 90% of its net revenues from its premium and luxury portfolios, and its priority brand stable posted sales growth of 19% in the first half. As a result, net revenues per case increased 20% at constant currency for the six-month period. Frank Family alone is expected to deliver approximately $21 million in EBITS for the full fiscal year ending in June.
Treasury continues to see strong gains in the U.S. for 19 Crimes, which neared 2.4 million cases on 9.5% growth in calendar 2021, according to Impact Databank. The 19 Crimes range has gotten a further boost from the addition of California wines like Snoop Cali Rosé and Martha’s Chard—partnerships with Snoop Dogg and Martha Stewart, respectively.
The company likewise saw rapid growth for upscale labels like Stags’ Leap, Beringer Knights Valley, and Penfolds last year. Penfolds, which has its own dedicated division within the group, saw its Americas revenues surge 39% to A$35 million ($25m) in the six months through December. The luxury label will release The Penfolds Collection—encompassing wines from Australia, California, and France—in August.
Globally, Treasury posted net revenues down 3.8% on an organic basis to A$1.3 billion ($930m), with EBITS slipping 1.2% to A$262 million ($187m). Still, chief executive Tim Ford noted that the group “delivered comparable EBITS growth of 28% when taking into account the effective closure of the Mainland China market, while at the same time continuing with the implementation of important changes across the business.”
With the streamlining of its Americas business largely completed, Ford said the company plans to be in growth mode looking ahead. “Following the past two years of significant change within TWE and the markets in which we operate, we have shifted our focus from a mindset of ‘recovery and restructuring’ to one of ‘growth and innovation,’” he said.—Daniel Marsteller
| Treasury Wine Estates—Leading Brands in the U.S. (thousands of 9-liter cases) |
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| Brand | Origin | 2020 | 2021 | Percent Change1 |
|
|---|---|---|---|---|---|
| 19 Crimes2 | Australia | 2,180 | 2,388 | 9.5% | |
| Lindemans | Australia | 973 | 764 | -21.5% | |
| Matua | New Zealand | 729 | 763 | 4.7% | |
| Sterling Vintners Collection | California | 663 | 550 | -16.9% | |
| Gabbiano Cavaliere d’Oro | Italy | 209 | 210 | 0.3% | |
| Stags’ Leap | California | 145 | 196 | 34.6% | |
| Beringer Brothers | California | 159 | 129 | -19.1% | |
| Uppercut | California | 67 | 85 | 27.6% | |
| Beringer Knights Valley | California | 69 | 76 | 10.9% | |
| Penfolds2 | Australia | 60 | 74 | 23.9% | |
| Beaulieu Vineyard | California | 70 | 68 | -3.3% | |
| St. Huberts The Stag | California | 48 | 64 | 31.9% | |
| Total Leading Brands3 | 5,372 | 5,366 | -0.1% | ||
| 1 Based on unrounded data. 2 Includes some California wine. 3 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2022 |
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Tagged : 19 Crimes, Martha Stewart, Penfolds, Snoop Dogg, Treasury Wine Estates
