TWE to launch new French wine label in China

Treasury Wine Estates (TWE) has announced a new growth stream for China: the introduction of a French wine brand.

The news was revealed at the company’s inaugural Investor Day in Napa, California.

TWE's French portfolio will aim "to disrupt the traditional ‘old world’ mould of the French category." While it has been created with North Asia in mind, it will be released globally.  

TWE Chief Executive Officer Michael Clarke notes: “French wine is now an exciting new addition to our portfolio offering, and will be one of our important launches in F18. While the French category is very established globally and regarded as a quality trustmark, particularly in North Asia, we will bring a ‘new world’ mentality to marketing and selling this wine.”

Clarke told investors the brand would immediately add to margins as it was being developed under a "capital lite" model that doesn't require TWE to invest in chateau or winemaking infrastructure.

TWE is the largest foreign wine importer in China, with Australia seeing its market share grow from about 18% in 2014 to 25% last year, mainly due to the success of TWE's premium brands such as Penfolds and Wolf Blass.

Currently the market for French wine is flat at about 44%.

TWE's French portfolio will include Bordeaux, Burgundy and Châteauneuf du Pape reds, Rosé from Provence and Champagne. It will closely mirror the Penfolds model, with the range having an "icon" wine priced at $279 a bottle, a "luxury tier showcasing the best of France" priced at $115 a bottle, and an "accessible luxury tier showcasing the best of France" priced at $58 a bottle.

“We have taken a very disciplined approach to fixing and growing our business models and brand portfolios, but our journey is far from over," Clarke said. "We’ve set the business up for long-term, sustainable success, while continuing to preserve the scarcity and value of our wines globally. The new French portfolio plays an important role in our strategy, as we look forward to continuing to deliver value for our shareholders.”