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Treasury Looks To Refocus U.S. Business As Covid-19, Private Labels Cut Into Full-Year Sales

August 13, 2020

Treasury Wine Estates posted net sales down 6% to A$2.6 billion ($1.9b) for its fiscal year ended in June, as headwinds from Covid-19 and challenging conditions in the U.S. continued to weigh on the company’s business. EBITS were off 22% to A$534 million ($382m).

Treasury’s Americas region saw sales slip 6% to A$1.1 billion (A$790m), with EBITS down 37% to A$147 million ($105m). Accelerating private label activity in the U.S. continues to present a challenge, Treasury said, noting, “Increased levels of supply in the market continued to contribute to accelerated movement of product through private label, which grew over 50% in the $8-$15 price points through 2H20.” As it looks to combat those conditions by streamlining and premiumizing its U.S. business, TWE added that “Work to explore the potential divestiture of selected brands and assets in the U.S. is underway.”

Still, the company has benefited from a pivot to off-premise and e-commerce channels in recent months. The priority brand stable including Stags’ Leap, Beringer Brothers, The Stag, Matua, and 19 Crimes posted depletions growth of 32% in the 13 weeks through June as off-premise gains ramped up. Treasury noted that its U.S. shipments trailed depletions by 7% for the year, “driven by industry-wide working capital management by distributors in response to the closure of key non-retail channels as a result Covid-19.”—Daniel Marsteller

Treasury Wine Estates AmericasTop 10 Brands in the U.S.
(thousands of 9-liter case depletions)
Rank Brand Origin 2018 2019 Percent
1 Beringer California 4,646 4,728 1.8%
2 19 Crimes Australia 1,555 1,632 5.0%
3 Lindemans Australia 1,162 1,123 -3.4%
4 Sterling Vineyards California 818 841 2.9%
5 Matua New Zealand 525 615 17.1%
6 Chateau St. Jean California 406 402 -1.0%
7 Beaulieu Vineyards California 380 349 -8.2%
8 Stags’ Leap California 112 151 34.2%
9 Cavaliere d’Oro Italy 151 +
10 Meridian California 213 146 -31.6%
Total Top 102 9,817 10,136 3.3%
1 based on unrounded data
2 addition of columns may not agree due to roundingSource: IMPACT DATABANK © 2020
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