Treasury Wine Estates has kicked off a review of its ‘Treasury Premium Brands’ division as the group feels the strain from “changing consumer preferences and economic uncertainty”.
The group, which in February posted a 1.1% decline in six-month sales to the end of December, redrew its operating model along divisional lines two years ago. Premium Brands handles Treasury’s lower-value portfolio, relative to its Penfolds and Treasury Americas reporting units, and primarily comprises Australian and New Zealand brands.
In the half-year figures, the division was down 4.5%, while the performance would have been worse if not for price increases implemented during the period.
“Like any business, we continually assess our structure and cost base to make sure we’re in the right position to continue to deliver on our strategy,” said CEO Tim Ford. “We’re now at the halfway point of our five-year strategy and faced with changing consumer preferences and economic uncertainty in major markets, we’re reviewing the structure in our Treasury Premium Brands division, as well as some other parts of our business.
“Last week saw the start of a programme of work that we’ll progress with our teams over the coming weeks.”
A spokesperson confirmed to Global Drinks Intel that the process is at an “early” stage and did not provide details on a potential timeline or outcomes.
In March 2021, Treasury offloaded four “commercial tier” brands to The Wine Group in the US. The acquisition of Napa Valley’s “luxury wine business” Frank Family Vineyards eight months later reaffirmed the company strategy of looking to value for growth rather than volume.
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