Penfolds’ manufacturer Treasury Wine Estates is reaping the benefits of its switch out of commercial wine production to focus on expanding its sales of luxury and premium wines such as Penfolds Grange.
Outgoing Chairman Paul Rayner told the company’s annual general meeting that the premiumisation trend where commercial wine sales were soft remained strong across the global wine sector.
This supported the closure of the company’s Karadoc winery in Victoria and the sale of several smaller commercial vineyards.
Rayner said: “The shift towards more premium products has successfully shaped our approach to attracting new customers into the category.
“…This has been a year of continued profits and EBITS margin growth.
“We have demonstrated the power of our premiumisation strategy and our strong category fundamentals, investing in our priority brands and innovation to strengthen our portfolio.”
During FY23 Treasury’s net sales revenue fell 2.2 percent but TWE achieved a 12.7 percent increase in prices per case of wine sold to $109.70.
The company’s EBITS margin was up 2.9 points to 24.1 and EBITS was up 11.4 percent to $583.5 million.
Rayner said: “Our diversified global business model – brands, markets, channels and countries of origin – has proven to be a significant strength, enabling us to adapt and respond to the ever-changing consumer and economic environment.”
TWE continued to expand the portfolio of wines produced at global production sites in France, the USA, China, New Zealand and Australia.