Daou Acquisition, Luxury Growth Boost Treasury Americas, As Sales Top $660 Million
August 15, 2024Treasury Wine Estates saw solid growth in its luxury wine brands—including new acquisition Daou—drive sales in its Americas division to A$1 billion ($660m) in the 12 months through June. On a reported basis, including the benefit of Daou, which joined the range partway through the year, sales grew 22%; they rose 0.6% on an organic basis at constant currency. EBITS in the Americas unit increased 13% to A$231 million ($153m) including the addition of Daou.
Beyond the contribution of Daou, Treasury Americas also saw 14% sales growth across its other luxury brands, which include Stags’ Leap, Beaulieu Vineyard, Frank Family Vineyards and Beringer. According to Impact Databank, Daou jumped 11% to 655,000 cases in the U.S. last year. Stags’ Leap was at 165,000 cases, Frank Family depleted 125,000 cases, Beringer Knights Valley was at 78,000 cases, and Beaulieu sat at 74,000 cases. Growth is expected to continue for the luxury portfolio, as more wine from the above brands becomes available looking ahead.
“Our underlying business gained momentum, particularly in the luxury price points where our portfolio outpaced the market and our key competitors, gaining nearly a full point of market share,” said Ben Dollard, president of Treasury Wine Estates Americas. Treasury recently deepened its alliances with RNDC and Breakthru, with RNDC handling its brands in key markets like California and Texas and Breakthru serving as distributor in Florida, among other states. The company also named Daou execs to key roles in the Americas help drive its luxury business.
Specifically for Daou, the company is targeting low double-digit sales gains moving forward, with the higher volume Discovery and Journey tiers rising ahead of the category, plus accelerated growth in the ultra-luxury tiers, boosted by investments in Paso Robles vineyards and third-party sourcing. The brand, acquired by TWE in December for up to $1 billion, posted sales up 21% to A$333 million ($220m).
Overall, volume for Treasury Americas grew 10% to 6 million cases in the 12 months through June, including Daou’s contribution. Outside the luxury stable, TWE Americas’ other brands were down a combined 5.5% in sales terms for the year. The company recently unveiled a new operating structure separating its portfolio into a Luxury segment and a Bold Brands premium segment including labels like 19 Crimes and Matua (19 Crimes was down 6% to 2.1 million cases last year, according to Impact Databank, while Matua dipped 1% to just under 760,000 cases). More than 50% of Treasury Americas revenue and nearly 70% of EBITS come from luxury wines on a pro-forma basis, with the luxury portfolio now amounting to 1.6 million cases annually.
Globally, Treasury saw sales grow 4% organically to A$2.7 billion ($1.8b) with EBITS up 3.6% to A$658 million ($435m) in the year through June, as luxury growth in Treasury Americas and Penfolds offset declines in its commercial portfolio. The group recently outlined plans to divest a number of commercial brands including Wolf Blass, Yellowglen, Lindeman’s, and Blossom Hill.—Daniel Marsteller
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