Treasury Wine Estates to cut global portfolio, focus on 'Power Brands'

Treasury Wine Estates has announced it will be cutting 40 wine brands from its stable, reducing its global portfolio from 76 to 30. 

In a presentation to the company’s investors on Thursday morning, TWE’s CEO Sam Fischer acknowledged the meaningful role wine plays in our lives, but said that in the face of changing markets and consumer preferences, the business needed to refocus its strategy to address three key areas.

“Premiumisation remains a powerful long-term trend, with consumers increasingly choosing to drink less but better,” Sam said. “We’re also seeing strong growth in lighter styles, more relaxed social occasions and moderation trends, particularly among younger consumers.

“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.”

Wynns Coonawarra Estate has been identified as one of 10 key winery brands in TWE's portfolio.

The 10 labels that align best to TWE’s new strategy, and which the business says present the largest growth opportunities, are its ‘Power Brands’ – Penfolds, DAOU and Matua – as well as Californian wineries Frank Family Vineyards, Beaulieu Vineyard and Stags’ Leap Winery, Australian wineries Wynns, Pepperjack and Coldstream Hills; and Squealing Pig in New Zealand.

The fates of Seppelt, St Hubert’s, and others in the TWE stable are not yet known.

Changes will begin to be implemented progressively from FY27, including increased investment in the Power Brands from FY28. TWE's $100-million-per-year savings target is expected to be realised by FY29. 

Although investors appear to be responding positively to the news, with shares jumping up 12 per cent (to $4.64) in the hours following, it's undoubtedly a blow for the wine industry, particularly in the face of a similar announcement made by Endeavour Group just a few days prior.

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