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Treasury Wine Estates Posts Double-Digit U.S. Gains As Premiumization Effort Continues

August 19, 2021

Treasury Wine Estates (TWE) revealed a solid set of numbers for its U.S. and global businesses last night, with overall revenues up 4.4% to A$2.6 billion ($1.86b) and EBITS rising 3.5% to A$510 million ($366m), even as the company navigated the global pandemic and prohibitive tariffs in the key Chinese market. Treasury’s Americas region outperformed the global business, with net sales up 11.3% on an organic basis to A$876 million ($628m), and EBITS increasing 66% to A$157 million ($113m).

“Despite a backdrop of significant external disruption, we have delivered on the priorities we set for ourselves at the start of the year, and therefore we remain very well placed to deliver on our long-term growth ambitions,” said Treasury CEO Tim Ford.

In the U.S., Treasury has reshaped its business lately with moves aimed at premiumizing its portfolio, including licensing 4.2 million cases in annual volume of commercial wines to The Wine Group. As a result, its luxury and premium portfolio now contributes 80% of revenue in its Americas region, up from 71% previously. The company’s focus brands—including labels like 19 Crimes, Penfolds, Beringer Brothers, Matua, and St. Huberts The Stag—saw sales increase 23% during the fiscal year.

Innovation has also played a role, with newer entries like 19 Crimes Cali Red and Cali Rose—on which the brand is partnered with Snoop Dogg—gaining a strong following out of the gate, joined by Penfolds’ California Collection. Further premiumization is on the docket, with Treasury noting that it will continue to cull non-priority assets in the months ahead. Meanwhile, TWE says it’s pleased with its recent route to market changes, which saw the group link with Republic National Distributing Co. (RNDC) for over one-third of its U.S. business, including new partnerships in large markets like California and Texas.

Starting with this new fiscal year, TWE has reorganized its business into three units: Penfolds, Treasury Premium Brands, and Treasury Americas, which Ford says will allow the company to accelerate growth moving forward. “It is already very clear to our teams that with each division focused on their unique strategic priorities and performance accountabilities, we are better positioned to take advantage of previously untapped growth opportunities across the globe,” he said.—Daniel Marsteller

Treasury Wine Estates’ Key Brands In The U.S.1
(thousands of 9-liter case depletions)
Rank Brand Origin 2019 2020 Percent
Change2
1 19 Crimes Australia 1,632 2,180 33.6%
2 Lindemans Australia 1,123 973 -13.3%
3 Matua New Zealand 615 729 18.5%
4 Sterling Vintners Collection California 715 663 -7.3%
5 Chateau St. Jean California 402 329 -18.2%
6 Cavaliere d’Oro Italy 151 209 38.7%
7 Beringer Brothers California 108 159 47.0%
8 Stags’ Leap California 151 145 -3.6%
Total Key Brands3 4,896 5,387 10.0%
1 Excludes brands licensed to The Wine Group
2 Based on unrounded data.
3 Addition of columns may not agree due to rounding.Source: IMPACT DATABANK © 2021
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