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AUS: Treasury Wine Estates in plan to supercharge smaller wine brands
Feb 15, 2016
(AFR) - Treasury Wine Estates has set ambitious growth targets for a group of nine regional brands which are set to be supercharged with substantial new investment and an extra 40 per cent of grape volumes.
Treasury's managing director of Australia and New Zealand, Angus McPherson, says there will be no chance of cannibalisation or any undermining of the top-tier 15 brands led by Penfolds and Wolf Blass, which have been strong performers under the turnaround at Treasury. Chief executive Mike Clarke has used a similar model of aggressively increasing marketing and brand investment to growth the high-profiled brands.
"I don't have the concerns about cannibalisation," Mr McPherson said on Tuesday.
"That's why you have a separate team," he said, referring to the specialist management team which has been set up to oversee the growth of the nine regional brands which are part of the next wave of growth.
Those brands are Coldstream Hills, Devil's Lair, Seppelt, T'Gallant, Heemskerk, Saltram, Baileys, St Hubert and Leo Buring.
The nine brands have low level of exports and Mr McPherson said the plan was to lift exports to 50 per cent of total volumes across the nine brands. The price bracket of between $20 to $30 per bottle is a particular focus.
The grape intake in the 2016 vintage is being increased by 40 per cent across the brands in the first stage of the growth plans.
Mr McPherson declined to specify how much extra investment was being put behind the brands, but said it was substantial and the plan was to replicate the same model which proved so successful in the top-tier brands such as Penfolds.
"We'd be looking for the same sort of trajectory," he said
"It's full systems go. We don't do anything slowly under his (Mike Clarke's) leadership".
The regional brands portfolio will be managed by regional wines general manager Christian Sim.
Some of the higher-end regional brands in the portfolio will have natural supply constraints because of the smaller wine regions they come from, and there will be priorities given to the brands able to deliver the biggest upside in the shortest time.
Saltram, based in the Barossa Valley in South Australia, is one of those earmarked for a particularly vigorous push.
Mr McPherson said it would be a twin strategy of driving growth in the Australian market for the nine brands, and also aggressively lifting their export focus because there was strong demand for regional brands from offshore customers.
But there would still be a heavy focus on accelerating the sales of the top 15 brands, because they delivered the most bang for Treasury.
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