Treasury Wine Estates stresses the importance of brand building

04 May, 2016

Treasury Wine Estates is on a mission to evolve from a business led by agriculture to a brand-building FMCG heavyweight and Blossom Hill is a perfect fit, according to its managing director.

The firm became the UK’s second largest supplier when it bought Percy Fox from Diageo at the tail end of 2015, a move that doubled its volume sales.

It has been busy integrating the team that built Blossom Hill into a top-three brand into its Twickenham office, and boss Dan Townsend is excited by the challenge ahead.

TWE’s core brands Wolf Blass and Lindemans sell at a premium to the average bottle of wine, and it also boasts the likes of Beringer and Penfolds, which have a strong fine wine offering.

Blossom Hill might not seem like a natural fit, but Townsend told OLN: “Blossom Hill is a different brand but it complements our portfolio perfectly.

“It adds real weight to our portfolio at entry level. It enables us to reach consumers we have not reached with our other brands. The largely female, younger audience Blossom Hill reaches is fantastic. It has 300,000 Facebook fans. The way the Percy Fox team connected with its consumers through Facebook is a lesson for any brand.

“They did a fantastic job. The fact that it still sells 4.5 millioncases in the UK is testament to just how much-loved it is. It is just behind Hardys and ahead of Echo Falls, but it is much more concentrated [the majority sales come from just a few SKUs]. It has the number one rosé, the number one white wine and the number two red wine overall.”

Townsend winces whenever he hears the word “premiumisation” because most shoppers are looking to spend less, rather than more. Instead he champions the benefits of a balanced range.

“Some people are going to spend £5 and nothing is going to tempt them away from that, so we have to cater to them.

“We are not on a mission to premiumise wine. We are about offering a balanced range. [In an off-licence] I don’t want to be confronted with five Pinot Grigios and White Zinfandels at the same price and nothing north of £8.

“Wine is an intimidating sector for a lot of consumers and for some convenience store owners and that’s where being able to offer simple advice based around a balanced range is really important.”

Townsend said he understands the need for supermarkets to rationalise ranges and is encouraged by his discussions with buyers. “We are a branded wine supplier and the opportunity is to demonstrate what our brands stand for, why they are relevant and why they should warrant space on the shelf versus own-label and exclusive label,” he said.

“We are moving from an agriculturally led business to a brand-building FMCG business. Our mission is to make our brands as relevant as possible.”

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