Treasury Wine Estates has completed what it has called a “detailed review” of its operating model, selecting a regional structure over the current portfolio-led set-up.
The group, which currently consists of the ‘Penfolds’, ‘Treasury Americas’ and ‘Treasury Collective’ divisions, confirmed today (22 April) that it will move to a four-region arrangement later this year. Each region will comprise “front-end core commercial capabilities across sales, marketing, direct-to-consumer and commercial strategy, supported by group functions”, the brand owner said.
The regions, which come into effect at the start of October, will be:
- The Americas,
- Australia & New Zealand & Europe,
- Greater China, and
- Emerging Markets (the rest of Asia, the Middle East & Africa)
Treasury had previously been made up of four regions – ANZ, EMEA, the Americas and Asia – prior to moving to its current structure in mid-2021.
“Key strengths from the current divisional operating model will be retained, including an enhanced focus on luxury brands, in particular for Penfolds, through central control of brand strategy in order to ensure global consistency and optimised international distribution,” the company said in a stock exchange filing.
“TWE will also retain specialist luxury sales capabilities in key markets and channels and prioritise and upweight investment in Penfolds and other priority luxury brands.”
Augmenting the changes are a slew of changes at the senior executive level, led by Penfolds MD Tom King (above) becoming group CCO, Penfolds CMO Kristy Keyte becoming group chief marketing & innovation officer and Treasury Collective MD Angus Lilley lined up to lead ‘ANZ & Europe’.
Also announced was an ongoing “brand portfolio strategy” review that “will be focused on a future-state portfolio of brands that individually and collectively are positioned to outperform the market”. The findings will be presented at Treasury’s ‘Investor Day’ on Thursday 4 June.
The filing featured an update on performance in fiscal Q3 – to the end of March: Following the near-17% slump in sales reported in the first six months of the current financial year, Treasury noted an “improved depletions (volumes) performance” in the latest quarter. Penfolds enjoyed a prosperous Chinese New Year, while US volumes climbed 9.1% on the same quarter a year ago.
Earlier this month, Treasury’s former COO, Robert Foye, made a public overture to his former employer that recommended, among other things, a return to a geographic operating model. In response, a spokesperson for the brand owner told Global Drinks Intel that it “has no current plans to pursue the proposal referenced”.
