Treasury Wine Estates CEO has Tim Ford confirmed to The Australian Financial Review that a review of the business is under way.
“Like any business, we continually assess our structure and cost base to make sure we’re in the right position to continue to deliver on our strategy,” he said.
“We’re now at the halfway point of our five-year strategy and faced with changing consumer preferences and economic uncertainty in major markets, we’re reviewing the structure in our Treasury Premium Brands division, as well as some other parts of our business.”
Treasury Premium Brands division includes brands such as Wolf Blass, Lindemans, Squealing Pig, Pepperjack, Wynns, Seppelt and 19 Crimes.
The company declined to comment to the AFR on whether jobs would be affected by the review, saying it was at an early stage.
According to the AFR the $15 per bottle (or less) price bracket is under the most pressure across the wine industry as households cut back because of cost-of-living pressures and rising interest rates.
TWE revealed in its 2023 half-year results that it had experienced softer consumption trends in the second quarter of 2023, relative to expectations, for entry-level premium wine in the US and UK, and commercial wine globally, contributing to volume declines for Treasury Americas and Treasury Premium Brands.
Growth also slowed for the 19 Crimes brand, with Snoop Dogg’s Cali Collection failing to generate expected sales.
Ford said in February that Snoop Dogg continued to be a winner for TWE and he expected the brand to gather momentum after adding global sales of 1.5 million cases in the past two years.
“19 Crimes we see as a growth engine for us for years to come,” he said. “It is slowing down off the rate of sales of the core 19 Crimes, as we call it, which is the Australian portfolio that has been big in the market for a decade. And that’s because we haven’t innovated for the last six to 12 months as much as we needed to.
“Our execution needs to improve and it will.”