Interview - Treasury Wine Estates’ Tony Watson
Last July, Treasury Wine Estates’ Tony Watson switched from commercial director for UK & Ireland to be the EMEA general manager at the new Premium Brands division. Almost a year into the job, Watson tells Lucy Britner about taking 19 Crimes beyond wine, a non-alcoholic Wolf Blass and TWE’s financial commitments to sustainability.
First, some housekeeping: The Premium Brands business unit was officially established in July 2021, and it boasts some big TWE brands.
In results for the first half of the company’s 2022 financial year, the EMEA region contributed around 42% of the Premium Brands unit’s net sales revenue, and the UK is the largest market for the division in EMEA by both value and volume.
The division features brands that are familiar to UK wine drinkers – including Blossom Hill, Lindeman’s, 19 Crimes and Wolf Blass – as well as a few that aren’t so well known. Yet.
Watson picks up the thread: “The pipeline of next-generation brands is going to recruit for the future,” he says, highlighting a forthcoming rosé from Squealing Pig, more wines from Coonawarrabased Wynns and a UK roll out for Pepperjack, “the number one Australian Shiraz”, which is currently being trialled in Europe.
TWE’s 2021 annual report describes Premium Brands’ growth objectives as being “focused on premiumisation and cost and capital efficiency opportunities”. Watson describes premiumisation as the primary focus, but he recognises that cost pressures are front of mind for retailers and consumers alike.
“We have done a number of things, including broadening our country of origin, especially in Blossom Hill,” he says. “We have launched some price-marked packs in Booker Cash & Carry with some varietals out of European countries of origin, so we’re facing into some of the shipping issues, but also some of the sustainability benefits of shipping out of Europe.”
Watson mentions that there is work going on to move TWE out of predominantly Australia, New Zealand and the US, into other countries of origin, with more news to be announced in the coming months. He also points to lightweighted bottles, which have both sustainability benefits and result in lower shipping costs.
Talk turns to Watson’s plans for the brands and the first mention goes to 19 Crimes, which he says is “well over a million” 9-litre cases in the UK and “still growing exponentially”.
“Over the past couple of years, we’ve been driving the core of the brand, which is the Red Blend and premiumising with The Uprising and Banished, but also trying to be disruptive with initiatives like premium bag-in-box and testing coffee Shiraz.
“We’ll continue to look at how we can diversify that brand because we think it can stretch.” Watson points to the brand’s hard seltzers, which he says feed into the lower-alcohol proposition, as well as some broader plans.
“There’s work going on around licensing and merchandising opportunities with the brand and also going into other adjacent categories.
“We’re keeping our net quite broad with 19 Crimes because we think it can stretch quite far.”
Over at Lindeman’s, the main topic is sustainability and the brand’s global carbon neutrality status.
“We’re not just measuring and offsetting with Lindeman’s,” he says, “we’re absolutely committed to continually reducing our carbon footprint and emissions and the impact that brand is having globally, so we’re really pleased with the accreditation by the Carbon Trust globally.”
Watson explains that Lindeman’s has a huge presence in the Nordic markets, a region he says has been driving sustainability across the globe.
Staying with sustainability and beyond Lindeman’s, at a company level, Watson says TWE has made some “bold commitments around being 100% recyclable or compostable packaging” by this year as well as plans to make half of all packaging from recycled materials.
Elsewhere, he talks about getting all energy from renewable sources by 2024 and moving to net zero emissions by 2030.
When it comes to keeping accountable on these measures, Watson points to AU$1.4 billion in loans that are tied to hitting some of those targets.
“There’s a commitment from the top all the way down the organisation,” he adds. “We’ve been really public with those metrics that are going to force us to reduce our carbon footprint.”
LOW AND NO ALCOHOL
Sustainability is a far-reaching word and Watson says low and no alcohol, which also falls under the sustainability umbrella, is a key area for the business.
The trouble is, wine hasn’t seen the success of the likes of beer in the low/no world.
“The key, and I saw this from my beer background, is getting the breakthrough technology to work that actually delivers low and no alcohol – the taste profile that consumers are wanting.
“I think there’s a way to go with wine, but we’ve invested in breakthrough technology in the low/no category that’s coming on stream later this year and we will be utilising that in a Wolf Blass Zero brand launch.”
Innovation will be a key part of Premium Brands’ MO, and while Watson says the future will include inflationary pressures and supply chain disruptions, he also emphasises further premiumisation, as consumers drink less, but better.