Daou, Penfolds Drive Solid Growth For Treasury Wine Estates

Treasury Wine Estates (TWE) saw its luxury portfolio drive strong gains in the 12 months through June, with the company reporting net sales up 6% at constant currency to A$2.9 billion ($1.9b) despite volume down 2.7% to 21.3 million 9-liter cases. EBITS jumped 16% to A$770 million ($504m) as higher-priced brands like Penfolds and Daou bolstered momentum.

Benefiting from a full fiscal year including the Paso Robles-based Daou brand, Treasury’s Americas unit saw sales rise 15% to A$1.2 billion ($785m) on volume up 5.5% to 6.3 million 9-liter cases. Daou posted 8% sales growth while Frank Family Vineyards increased 3%, propelling gains for the luxury portfolio despite a 10% dip for Treasury’s other luxury brands. TWE noted that Daou Discovery is now the leading Cabernet above $20 in the U.S. market, and that the overall brand has growth three times faster than the total luxury wine segment while expanding distribution, boding well for further gains.

Treasury Americas’ lower-priced brands fell 6.6% for the year, largely due to 19 Crimes, partially offset by growth for New Zealand’s Matua. The company noted that on an organic basis its Americas volume slipped 6.6% with net sales down 5% for the fiscal year. The unit’s shipments exceeded depletions by 400,000 cases in the luxury stable and by 200,000 cases in the premium portfolio.

One key change coming to TWE in the U.S. is its transition to Breakthru Beverage Group (BBG) in the California market, where previous partner RNDC has opted to end operations. According to TWE, the “appointment of BBG reflects the scale and breadth of their distribution platform in California and the strength of the existing strategic partnership between the two parties, which already spans a number of key states, including Florida.” While TWE says depletions growth is expected in California in the new fiscal year after a decline over the last 12 months, it added that it expects the transition to cost about A$50 million ($33m) in sales.

Another change is that moving forward TWE Americas will become a “luxury-focused portfolio division while a new global Premium brands division, Treasury Collective, has been formed,” combining the Treasury Premium Brands stable with Treasury Americas’ non-luxury brands. TWE says the move better positions the business to reflect its strategic focus on the luxury tier.

Meanwhile, as previously announced, Diageo veteran Sam Fischer will succeed Tim Ford as CEO of Treasury on October 27. The company called Fischer “a proven CEO with more than 30 years of global experience in alcohol beverages, consumer goods and luxury brands, with an impressive track record leading organizations through significant transformation and growth.”—Daniel Marsteller

Tagged : 19 Crimes, Breakthru Beverage Group, Daou, Frank Family Vineyards, Matua, Treasury Wine Estates

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