Treasury Americas’ President Unveils Profit-Boosting New Wine Strategy

Ben Dollard, President of Treasury Americas

With reports of global wine sales volume declines for the past two years, it was refreshing to learn that one of the world’s largest publicly traded wine corporations, Treasury Wine Estates, actually achieved an 8% increase in profit during its recent fiscal year (ending July 30, 2024).

Given Treasury’s flurry of both acquisitions and divestments, many people have been curious about how these results were achieved. Therefore, I reached out to Ben Dollard, President of Treasury Americas, and in an online interview he explained how the company’s new focus on the ultra-premium and luxury wine segments was allowing them to pull ahead of the pack.

“We are pleased with the outcome of our results – specifically with our U.S. wine businesses,” stated Dollard. “Highlights include the acquisitions of Daou and Frank Family wineries to complement our other brands. And we became a $1 billion business for the first time (in Australian dollars).”

The net profit for Treasury Wine Estates was AU$407.5 million (fiscal year 2024), which is an increase of 8% compared to its 2023 fiscal year, according to their annual report.

So how did Treasury Wine Estates, one of the few publicly traded wine corporations that focuses only on wine (competitors also offer spirits, beer, and other products, such as luggage, to offset potential agriculture dips in grape supply), achieve this success?

During our discussion, Dollard highlighted five strategic focus areas that are currently boosting Treasury’s profitability.

With over 70 wine brands globally, many having significant historical significance, such as Penfolds Grange in Australia, Georges de Latour from Beaulieu Vineyards, and Beringer Private Reserve in Napa Valley, Treasury has effectively curated a collection of iconic brands that offer them global flexibility.

For example, when China imposed tariffs of up to 200% on Australian wines in 2021 (they were just lifted in March of 2024), Treasury was able to focus on other markets.

“Penfolds was already distributed throughout Europe and the U.S., so we pivoted to other markets,” explained Dollard. “It shows the great strength of our relationships and distribution capability around the world.”

Carefully curating the portfolio is part of this strategic focus, and explains the flurry of acquisitions and divestitures Treasury has embarked upon in the last few years.

“We are focused on the luxury wine market of $20 per bottle and above, and are divesting commercial brands priced at $10 per bottle or less,” reported Dollard.

To this end, they have recently announced they are selling lower priced brands within Blossom Hill, Lindeman’s, Wolf Blass and Yellowglen.

On the luxury side, their acquisition of Frank Family Vineyards in Napa Valley and Daou in Paso Robles, both well-known brands in the U.S. with price points ranging from $20 to $300 per bottle, match this strategy well.

“Both brands filled out important parts of the portfolio over $20, and they are growing rapidly,” said Dollard. Treasury defines luxury wine brands as over $20 per bottle and premium brands as $11 to $20 per bottle.

Indeed, according to Tim Ford, Treasury Wine Estates CEO, more than 75% of their revenues are derived from their luxury brands.

Daou Winery in Paso Robles, California – Part of the Treasury Americas Portfolio

Treasury Americas adopts a balanced approach, keen on not solely focusing on luxury wines, as historical economic downturns like the 2008 recession have shown a consumer shift towards more affordable wines. They have thus kept a selection of strong premium brands, costing between $11 and $20, known as their ‘Bold Brands’.

Brands like Matua, 19 Crimes, Squealing Pig, and Pepperjack fall under this category. Dollard emphasized, “These brands enable us to reach new customers and are essential to our Bold Brands division. They fuel our innovation.”

Innovation is clearly a priority, illustrated by a temperature-sensitive label on their Matua sauvignon blanc from New Zealand, which changes color to indicate optimal drinking temperature. Furthermore, they introduced an augmented reality feature to the labels of their 19 Crimes wine, animating the histories of noted Australian convicts.

“We believe in investing in digital marketing, technology, and innovation to connect with consumers,” stated Dollard.

“We have a consumer lens, and spend a lot of time trying to understand how consumers want to engage with us and our brands.”

Treasury spends a lot of time focusing on the wine consumer and their needs, and is especially interested in understanding the needs of new consumer segments.

“We have a consumer lens, and spend a lot of time trying to understand how consumers want to engage with us and our brands,” stated Dollard. “We like to be there to engage with consumers in the market and at events, as well as when they visit our wineries.”

Therefore, Treasury creates a variety of consumer experiences at different locations. “We recently participated in the luxury car show in Monterey (Pebble Beach Concours d’Elegance), and showcased our Daou wines. It was a great experience with wonderful consumer engagement,” he reported.

Other consumer engagement experiences have included Treasury wines poured at New York Fashion Week, The Daily Front Row events in LA and the Hamptons, Beach Life and the Santa Barbara Film Festival.

Another way they engage with consumers is through philanthropy, especially with their Frank Family brand. “Frank Family has a long tradition of giving back to different charitable causes, and so we want to continue that. It is a great way to show our gratitude and responsibility.”

Portfolio of Wine Brands Offered by Treasury Americas

Major entities in the wine industry recognize the importance of establishing durable relationships with distributors. This is particularly true in the United States where the predominant method of wine sales involves a three-tier system. Within this framework, distributors play a crucial role by promoting and distributing wine to various retail venues including grocery stores, restaurants, and specialty wine shops.

“Our strategy is centered on cultivating strong, enduring ties with our distributors,” stated Dollard.

This involves a strategy whereby they utilize each party’s strengths collaboratively. Similar to other wine giants, Treasury collaborates with multiple distributors to penetrate markets across numerous U.S. states and over 70 countries worldwide.

Being based in Australia, a nation with a history of rainwater harvesting dating back to the 1800s, it’s no surprise that Treasury Wine Estates is forward-thinking in their water conservation and management practices for their vineyards and wineries. Additionally, their commitment extends to other environmental initiatives.

“Sustainability is part of our DNA. Every day that we wake up we have a responsibility in how we think about the footprint of our wineries. We are always concerned with water management, but also the use of solar, the equipment that is used in the vineyard, and energy conservation,” explained Dollard.

Since Treasury owns 11,300 hectares (27, 933 acres) of vineyards around the world, and is one of the largest landholders in Napa Valley, this type of focus on sustainability is important in the communities in which they operate.

Dollard said that they are also concerned with social responsibility, and have active “community engagement in Napa Valley.” The company currently employs 2,500 team members, and has several programs to promote DEI (diversity, inclusion, and equity).

When asked if Treasury has any more winery acquisitions in mind for the future, Dollard replied: “We are always open to considering opportunities, as long as the winery has amazing and authentic stories to tell.”

In the end, Treasury Wine Estates plans to continue their new focus on luxury and ultra-premium brands, while still allowing for innovation and expansion of their ‘Bold Brands.’

“We will continue to share our brands with consumers, tell our stories, provide experiences, and build solid distribution and retailer relationships. And we will continue to think about the new generations and how wine can be an important part of a happy lifestyle,” concluded Dollard.

Penfolds Winery in Australia – Part of the Treasury Wine Estates Portfolio

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About the Author: Chris Lehoux

Meet Chris Lehoux, an experienced wine connoisseur and dedicated blogger with a deep passion for all things wine-related. With years of expertise in the industry, Chris shares insightful wine reviews, valuable wine tasting tips, expert pairing advice, and captivating tales of vineyard visits. Join Chris on a journey through the world of wine, where every sip is an adventure waiting to be savored!