This quote from the new CEO of Treasury Wine Estates (owner of Penfolds, Rosemount, Beringer, Ch. St. Jean and many others) made me chuckle. The company, he says, needs to change from “an agricultural company to a brand-driven, marketing-led company.” (He’s an ex-Coca-Cola exec.)
“To restore profits, he’s been selling discount wine fridges to encourage drinkers to buy more bottles and clear retailers’ stock [and] increasing marketing spending 50 percent,” the story says.
Maybe best of all:
Clarke wants to turn the Etude label into a worldwide pinot noir brand that uses New Zealand grapes in New Zealand and Australian grapes in Australia. At present it’s only made and mostly sold in the U.S.
The move would allow Treasury to pool its marketing budget and allow Etude “to be a stronger brand,” he said. “The stronger your brands are, the more adaptable you will be and the more resilient you will be.”
at a loss for words. Dilbert’s (worst) nightmare CEO come to life. Sigh.
No real surprise, and doesn’t bother me. I haven’t bought a bottle of one of those brands in many years. I do have a soft spot for Ch. St. Jean, it’s such a lovely place to stop, and the wines used to be reasonably interesting back in the 80s and 90s.
Where do we get the discount wine fridges?
What he wants to do with the Etude label is a shame although I think the damage has been done for a while now. Etude was one of my first loves back before it was sold.
However, from a purely business perspective, I understand the vision and it probably makes more sense considering how much wine is purchased by people who only know labels.
I guess I’m jaded as my wife is in the big wine biz and sells Treasury. If one owned Treasury stock or worked there one might be glad he’s looking for some tweaks as they have not exactly flourished in the last few years. Wine is a business, which running for profit often runs afoul of some of the romantic notions held on the wine board. Businesses market.
It seems to me that Treasury dumped a huge amount of money into growing in a lot of areas. They aren’t doing as well as they had hoped. So they are looking at streamlining some aspects involved int eh process of getting wine from the dirt to the table. The “move from agricultural” comment may just mean that they do not want to own and use their own grapes and land but rather buy or lease from independents who are the agriculturists. They free up capital and/or reduce debt. Who’s to say what result that has on the actual wine. On a micro level there is plenty of great wine made by someone who does not actually own the vineyards. There is also a lot of great wine made by entities that own their own vineyards. What’s to bemoan about a shift along that spectrum?
They (Beringer) paid Soter a good sum for Etude. Then they chose to pump more capital in to improve the facilities. So why wouldn’t they look to increase profitability? Once Soter sells and someone has to invest the dynamic changes.