Treasury Americas’ New President Aims To Drive Luxury Labels In The U.S.September 24, 2019
In a surprise move revealed in recent weeks, Treasury Wine Estates named company veteran Angus McPherson as president of its Americas region and global sales. Earlier today, McPherson detailed the company’s strategic plan for the U.S. for investors, focusing on premiumization and innovation initiatives across the portfolio.
Overall, TWE is aiming to deliver a 25% EBITS margin in the U.S. looking ahead, up from 19% in its fiscal year ended in June. McPherson said a focus on portfolio mix—upweighting its position in the luxury and masstige ($10-20) segments—and leveraging its revamped route-to-market will be key in reaching that goal.
“We’ve established a separate luxury sales team to drive distribution with a tight-focused portfolio of Stags’ Leap, BV, and the top end of Beringer, as well as Penfolds,” McPherson said. “The team is actively targeting fine wine accounts.” Stags’ Leap was at about 112,000 cases in the U.S. last year, according to Impact Databank, while Penfolds was at around 66,000 cases. “Penfolds is becoming an increasingly important brand for our Americas region,” McPherson noted.
TWE is also aiming to boost its luxury portfolio with new direct-to-consumer initiatives. “DTC sales are an increasingly important part of the category, and one we’re well positioned in,” said McPherson. “We’re adding new experiences to our sites and believe this will reinforce our key brands with consumers.”
Among the other growth areas TWE is focusing on, McPherson cited strong volume progress in cans, half-bottles, and three-liter packages. The company is attacking those segments with Sterling resealable aluminum half-bottles and Main & Vine spritzers. Meanwhile, McPherson added, “Beringer Brothers, our spirits barrel-aged wine, was the top new brand by value in IRI in 2018.” Beringer Bros. recently earned an Impact “Hot Prospect” award after reaching 60,000 cases in its first year on the market.
As for challenges facing the business, McPherson noted, “The rise of private label is making the market more challenging. But we’ll deliver share gains over the longer term.”
Treasury saw sales climb 12% to A$2.8 billion ($1.9b) in its fiscal year through June on a constant currency basis, as the company’s $10 and above business increased by 27%. Wines retailing at $10 and up now account for nearly 70% of net sales for Treasury. As TWE CEO Mike Clarke summed up, “Premiumization will remain at the core of everything we do, even in our commercial portfolio.”—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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