Australian Vintage is banking on “the most exciting launch in AVG’s history” – a petite wine range called Poco Vino – to accelerate brand growth after posting a $473,000 half-year loss to December 2024.

Despite sales falling 7.4% to $126.1million, Australian Vintage described it as the best normalised cash outflow result in four years.

Market share was maintained in the UK and Australia and New Zealand, with white and sparkling wine growth offsetting declines in low-price reds.

Australian Vintage also remained the global leadership in no-and-low alcohol during the period, with continued strong UK growth.

The company predicted it would be free cash flow neutral by FY25, then $10 million-$20 million in FY26, and $20 million+ per annum by FY27.

Australian Vintage CEO Craig Garvin said: “Our first-half results reflect early progress in restoring shareholder value, balancing cost discipline with targeted investments for sustainable growth, with positive cash flow, reduced debt and
accelerated brand growth as key measures.

“These results highlight that Australian Vintage is an agile industry leader with innovation as a core capability. We are focused on delivering profitable growth while maintaining strong cash flow control. driven by discipline cost control and operational efficiencies.”

Premiumisation and innovation now account for 26% of the company’s revenue. Successful innovations in FY24 have included CTZN (the first AI wine), Lemsecco (a ready-to-drink citrus spritz) and Tempus One Peach.

However, the Australian Vintage launch that is expected to be a gamechanger is launch of Poco Vino, a smaller format-based wine innovation that CEO Craig Garvin says will “create a new category in the wine industry”.

 Poco Vino is marketed in a stylish 187ml bottle that resembles a perfume.

“Think of what Nespresso did for coffee,” Garvin told The Australian.

“It is cool and it’s stylish. This is approachable and it fits lifestyle. So, for example, we’ve just been ranged in Dubai duty free.”

The product sell for the Australian Vintage launch of Poco Vino: “Poco Vino is on a mission to shake up the wine category with a fresh, approachable, and unapologetically fun take on enjoying wine.

“The elegant, compact and vibrant bottles make navigating your favourite varietals simple and enjoyable, removing the overwhelm of endless choices.

“Whether it’s a midweek treat, a picnic, a dinner party, or even at 35,000 feet, Poco Vino is wine made easy.

“No jargon, no fuss, just unapologetically good wine. Anytime, anywhere.”

Garvin said: “I recently attended the Wine Paris tradeshow, where Poco Vino captured global attention as a standout breakthrough innovation.

“Poco Vino pioneers a ‘make where sold’ wine sourcing model, utilising France and Italy for Europe, Napa for the USA and Australia for Asia Pacific driving significant cost efficiencies while aligning with consumers’ willingness to pay a higher price for convenience.

“Early orders are extremely encouraging and ahead of expectation. Major UK and Australian retailers have agreed to range the product, which is set to launch in the 2025 calendar year. With pre-orders for FY26 expected to exceed $8 million, this innovation represents the most exciting launch in AVG’s history.”

Garvin returned to the top job in October 2024 after his shock termination in May 2024.

“Since returning to the business in October, I have made it a priority to visit our key markets twice and meet with all key partners to ensure our commitment and connection at the highest level,”Garvin said.

“This is ensuring we are leveraging strategic partnerships to accelerate growth in key international markets, China and the rest of Asia represent a significant upside to our business in the short to medium term. The company has partnered with COFCO [China’s leading wine distributor] and Oceanus [a key distributor in Asia], with shipments to Asia expected to increase by double digits for the full year.”

Initiatives to increase cash flow

Following its board renewal in 2024, Australian Vintage said it had prioritised free cash flow generation, debt reduction and top-line growth.

Key initiatives include:

• Investing in high-margin brands and innovation to drive category leadership
• Expanding in China, the rest of Asia and the Americas through partnerships
• Leveraging its balance sheet while investing inventory into markets and categories, without discounting pillar brands, where it currently does not compete
• Reducing fixed grape supply and increasing sourcing flexibility
• Driving further operational efficiencies
• Optimising its operational footprint
• Maximising utilisation of industry-leading processing facilities to support growth and potential industry partnerships/consolidation.

Garvin said: “With strong innovation and strategic expansion, Australian Vintage is set to generate positive cash flow in the second half of FY25, thereby achieving free cash flow neutrality for the full financial year.

“I am extremely pleased with the alignment we have established between our newly appointed board and management. Our board is supporting our progress with professional expertise and strategic acumen to deliver improved results and
market performance.”

Garvin indicated Australian Vintage’s future could include merger and acquisition deals.

“As the industry continues to consolidate globally, we remain proactive in evaluating opportunities that drive long-term value. Our processing capabilities, wine expertise, and assets are world-class and a strategic advantage when paired
with the right incremental volume,” he said.

However, he told The Australian that while Australian Vintage had been keen to buy Treasury Wine Estates’ Wolf Blass, Yellowglen, Lindemans and Blossom Hill wine labels, the company “couldn’t justify the sale price demanded”.

Wolf Blass sale off the table for TWE