Treasury Wine Estates (TWE) has outlined plans to reshape its portfolio, with an emphasis on luxury brands while increasing its focus on lighter styles and lower-alcohol wines.
CEO Sam Fischer said that the shift comes in response to changing consumer preferences and new market dynamics.
Under the new vision for TWE, Fischer said: “Premiumisation remains a powerful long-term trend, with consumers increasingly choosing to drink less but better.
“We’re reshaping Treasury Wine Estates to where we see the strongest long-term demand and growth opportunities in luxury red, luxury white and more contemporary wine experiences.”
New model
As the company moves towards premiumisation, Fischer continued that TWE will transition to a portfolio centred on two categories: Power Brands and Regional Heroes.
The Power Brands, which include Penfolds, DAOU and Matua, will receive increased investment to accelerate growth across multiple markets.
Meanwhile, the Regional Heroes, including Frank Family Vineyards, Beaulieu Vineyard, Stags’ Leap Winery, Wynns, Squealing Pig, Pepperjack and Coldstream Hill, will remain focused on local markets.
According to TWE, these 10 brands are expected to contribute 90% of net sales revenue within five years.
At the same time, the company plans to reduce its portfolio of 76 brands to fewer than 30, with a quality-over-quantity mindset.
With that said, TWE commented that more affordable brands such as 19 Crimes, Lindeman’s and Blossom Hill will continue to be important.
Immediate steps
Considering next steps, TWE has also started a strategic and operational review of its Americas business. The review will consider a range of options to improve performance and shareholder value.
In terms of the new premium focus, the company said that the changes will be implemented gradually from the 2027 financial year, taking place over several years.
Fischer said: “TWE’s transformation program is designed to position TWE for long-term sustainable growth by creating a more focused portfolio, a simpler and more efficient operating model and stronger alignment to evolving consumer preferences globally.”
