Vintage Wine Estates has concluded a business review that has advised a restructure to “focus on a core set of super-premium-plus priority brands”.
The reset, under the auspices of recently-appointed CEO Seth Kaufman, will see a reduction of the US company’s lower-margin products and activities, with the Clos Pegase winery in Napa and Viansa property in Sonoma both poised to be “monetised”. At the same time, four of what the group called “lifestyle brands” will be retained.
These comprise Bar Dog, Cherry Pie and Layer Cake wines along with ACE Cider, while the higher-end estate brands that have been deemed safe are Girard, Kunde, BR Cohn, Laetitia and Firesteed, “among others”. VWE defines “super-premium-plus” as wine retailing for US$15 and above per bottle.
Also deemed surplus to requirements are some production services and direct-to-consumer platforms such as “digitally-native brands and telemarketing”.
“The complexity of our business has resulted in a disproportionately high-cost base,” said Kaufman this week. “We need to simplify beyond our product offerings and fundamentally reconstruct our business model.
“Getting from here to there starts by recognising where our strengths lie and identifying the areas of the business in which we shouldn’t operate.”
One consequence of the redraw will be an employee headcount cut of around 15%, resulting in a saving of around US$7m per year.
“We expect this transformation to result in a smaller company, but one that can grow sustainably while generating top-quartile industry margins,” Kaufman concluded.
Late last year, Vintage created the role of operations VP, appointing former global director at Unilever’s ‘centre of excellence’ Farzana Shubarna.
