It is ten years since Treasury Wine Estates (TWE) de-merged from Foster’s, described by CEO Tim Ford at its recent investor day as a decade “of significant change and achievement”.
Ford said there were global celebrations taking place this month as the business moves forward to an “enhanced consumer-led approach brand model” targeting emerging luxury markets around the world.
“We have established a strategic blueprint for our next five-year plan, headlined by our ambition to be the world’s most admired premium wine company.
“To deliver on this ambition, we will be bold in our decision making and the way in which we innovate, to drive change in the world of wine. This is the TWE way – to boldly lead change in the world of wine,” he said.
Earnings for the business are expected to be between $495 million - $515 million for the full year with the business targeting high single-digit earnings growth with a group-wide earnings margin of 25 per cent. These projections exceed market expectations and represent growth of 33 per cent in the second half of FY21, when compared to the first.
TWE is currently undertaking a global supply-chain optimisation program expected to deliver annualised benefits of at least $75m by FY23.
The business kicked off its 10th anniversary campaign in April: Getting better with age, with physical and virtual celebrations hosted across TWE’s regions celebrating a decade of Thinkers, Makers and Doers. TWE has also created a special celebration edition bottle of shiraz for team members that can be enjoyed today or cellared for the next 10 years.
On investor day, Ford made it clear on what makes TWE tick: as much as its wine, it is its people.
“Our people are our most important asset,” he said, and the company is committed to finding ways to improve their engagement, professional development, to be bold, and to find ways for them to improve their connection with each other and consumers.
Since Ford took the helm at TWE last year, the business developed and launched TWE DNA, central to the culture of TWE and the business has been named as one of the top companies to work at in ANZ in the 2021 AFR BOSS Best Places to Work list.
Melissa Peluso has been with Treasury since before it demerged from Foster’s and is Channel Enablement Lead, Procure to Pay ANZ. Of her enduring time with the business, she says:
“One of the things that I love after having worked for TWE for 11 years is that there are always opportunities to jump in and get involved, whether that’s doing things differently with a creative twist, improving processes or simply opportunities to be part of the TWE community. There are lots of positive people around who are happy to offer advice and lend a hand, and I think that really helps us to bring our whole selves to work at TWE.”
Of course, the decade has not been without challenges and most recently, to watch TWE being pounded by the tariffs from China was gruelling. However, diversification was always on the cards for the business and in the investor day presentation, Ford said diversification has been at the heart of TWE’s strategy, as revealed by the business’ multi-regional vineyards, sales teams, geography and various price points.
Ford told the Drinks Association: “Whilst there have been challenges throughout the years such as drought, bushfires, the global COVID-19 pandemic and the tariffs imposed by China on Australian wine imports, I’m particularly proud of the agility and resilience that we’ve shown as a business. The fundamentals of our diversified global business remain strong and I am confident that they will continue to support our growth plans into the future.”
When TWE acquired Diageo Wine in 2016 it had access to a premium Californian fruit supply and in that same year, the business set up its self-distribution model in Asia. In 2019, TWE acquired production and vineyard assets in Bordeaux and expanded its South Australian luxury winemaking infrastructure.
As far as the US goes, TWE has been steadily growing its reach introducing a direct distribution model in 2018 and then restructuring the business last year to deliver a ‘future state premium wine business’. TWE released its Penfolds Californian Collection early this year.
Ben Dollard, Head of Treasury Americas, said the states of California, New York, Texas, Florida and Illinois are priorities and the company has entered a long-term distribution agreement with Republic National Distributing Company (RNDC) which commences on 1 July. In a previous statement, Dollard said: “Our decision to partner with RNDC presents us a terrific opportunity to cultivate our trade partnership, to fast track growth, execute our plans, and build long-term value.”
When TWE’s new business model kicks into gear on July 1, it will be headed by three new brand lead divisions – Penfolds (led by Tom King), Treasury Premium Brands (led by Peter Neilson) and Treasury Americas (led by Dollard) - and supported by the global strength of supply operations, Treasury Business Solutions, and a streamlined corporate centre.
“Our new brand-portfolio led divisional operating model…will ensure we unlock our future growth potential by driving increased focus and accountability throughout our business,” said Ford.
