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Treasury To Revamp Production Operations In California

June 3, 2016

Treasury Wine Estates (TWE) is streamlining its supply and production operations in California as part of its integration of the recently acquired Diageo wine business.

Under this plan, TWE says it will discontinue winemaking at the Chateau St. Jean winery in Sonoma County, shifting production to Beringer; consolidate California production in the Central and North Coast regions, with luxury production focused at Beringer and Masstige wine at its Paso Robles winery; focus winemaking at Beaulieu Vineyard solely on the luxury end; consolidate luxury winemaking on-site at Sterling Vineyards; sell the Paicines winery on the Central Coast (with production consolidated at Paso Robles); and also sell off a number of small vineyards and land holdings.

These moves are expected to be completed by the end of TWE’s fiscal 2018.

Additionally, TWE says it’s committed to ramping up investment in its U.S. operations over the next few years to support the growth agenda for its California offerings in the Asian market, where it has enjoyed strong progress of late. In the first half of TWE’s current fiscal year (ended December 31, 2015), the company’s Asia unit more than doubled its net sales.

TWE completed its $600 million acquisition of Diageo Chateau & Estate earlier this year. The deal doubled the company’s $10-and-above business in the U.S. market.

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