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), marking an 8% increase from the previous fiscal year, as detailed in their annual report.

What strategies did Treasury Wine Estates, a unique publicly traded wine-only company (unlike its diversely invested competitors), employ to record such a success?

During our discussion, Dollard highlighted five key strategic focus areas that have been instrumental in bolstering Treasury’s profitability.

With a collection of over 70 renowned wine brands worldwide, including historic names like Penfolds Grange in Australia, Georges de Latour at Beaulieu Vineyards, and Beringer Private Reserve in Napa Valley, Treasury has developed a strong and flexible global portfolio.

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 doesn’t solely focus on high-end wines, understanding that past financial downturns urged a shift back to more economical choices. Thus, they sustain their popular premium wines, priced between $11 and $20, known as their ‘Bold Brands’ category.

Brands like Matua, 19 Crimes, Squealing Pig, and Pepperjack comprise this division. “These brands help us engage new consumers and invigorate innovation,” stated Dollard.

Innovation is evident through Matua’s innovative label from New Zealand, featuring a thermometer that changes its color to signal the wine’s ideal chill temperature. Similarly, 19 Crimes uses augmented reality technology on its labels to animate narratives of notorious Australian outlaws.

“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 players in the wine industry recognize the importance of maintaining robust relationships with distributors, particularly in the U.S. where the predominant method of selling wine involves the 3-tier system. This system facilitates distributors in promoting and distributing wines to a variety of vendors including grocery stores, restaurants, and wine shops.

“Building strong, enduring connections with our distributors is vital,” noted Dollard.

The strategy involves a collaborative method where the unique competencies of each party are optimized. Treasury, similar to other companies within the sector, collaborates with numerous distributors to expand their market reach across numerous U.S. states and over 70 countries globally.

Considering that Treasury Wine Estates is based in Australia, a nation recognized for its rainwater harvesting expertise since the 1800s, their forward-thinking stance on water conservation and management across their vineyards and production facilities is notable. Their environmental initiatives extend beyond water management.

“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 employees 2,500 team members, and has several programs to promote DEI (diversity, equity and inclusion).

When asked if Treasury has anymore 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 future, Treasury Wine Estates is committed to prioritizing their luxury and ultra-premium brands while still fostering the growth and innovation of their ‘Bold Brands’.

“Our goal is to remain engaged with our consumers by sharing our brands, telling our stories, offering experiences, and strengthening our distribution and retail partnerships. We also aim to anticipate the preferences of new generations and illustrate how wine can play a vital role in a joyful lifestyle,” stated Dollard.

Penfolds Winery in Australia – A significant part of the Treasury Wine Estates Portfolio

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