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Treasury Consolidates and Sells Wineries

July 2016
 
by Paul Franson
 
 
pumpover at Beaulieu Vineyard
 
Winemaker Domenica Totty oversees a pumpover at Beaulieu Vineyard, which recently invested in updating winemaking facilities for its top-tier labels.

Napa, Calif.—As expected after its $552 million purchase of the majority of spirits giant Diageo’s wine business in October, Treasury Wine Estates (TWE) is consolidating production of those brands with its existing brands.

TWE’s most significant moves are to consolidate much of its luxury wine production (bottles that sell for more than $20 retail) at the Beringer Vineyards facility on Pratt Avenue in St. Helena, Calif., and most “masstige” brands (bottles selling for $10-$20 retail) at the facility in Paso Robles, Calif., that was once Meridian Winery.

However, TWE will continue to make top-tier labels Beaulieu Vineyard and Sterling Vineyards at those wineries and maintain winemaking at three other luxury producers in Napa Valley.

TWE now has two wineries at the Sterling property located south of Calistoga, Calif. One, which is very popular with visitors, is at the top of its knoll. The other is little noticed and at the bottom of the sweeping hill. Currently they make the reserve wines at the bottom and all others at the top of the hill.

The new plan will transfer production of the very highest level wines like Platinum and Iridium to the top of the hill and make a multi-million-dollar investment to modernize the winemaking facility.

Spokesperson Megghen Driscol said, “Not only will this increase quality, but it will make for a better experience for consumers who take the self-guided tour at Sterling.”

All other Sterling luxury winemaking will be moved to the Pratt Avenue winery.

As at Sterling, the company is investing several million dollars in the Beaulieu Vineyard (BV) winery in Rutherford to modernize and make best-in-class wines with an emphasis on the high-end reserve winemaking. These upgrades will allow the winemaker to make Georges deLatour, Tapestry and a select few direct-to-consumer-only wines onsite at BV. All other luxury BV winemaking will be moved to the Pratt Avenue winery.

Also in Napa Valley, the company will continue producing the high-end wines Étude, Stags’ Leap and Provenance at their existing facilities.

In another significant move, the company will discontinue winemaking at Chateau St. Jean winery in Sonoma County and transfer production to Beringer in St. Helena.

All hospitality and direct-to-consumer functions remain at the site. This is similar to the situation at St. Clement Vineyards in Napa Valley, which now serves primarily as a hospitality center.

TWE’s Driscol described this arrangement as very similar to a winery co-op or “winemaker studio.”

“We are merely changing where CSJ is made. This will allow us to not only take advantage of scale and efficiency but will give our team a state-of-the-art luxury winery to make their wines in. Regardless of these changes, they remain committed to supporting and investing in Chateau St. Jean, and we have some exciting growth plans ahead for the brand.”

Masstige wines move to Paso Robles
TWE will produce its masstige wines and lower-end wines at the Paso Cellar 360 winery in Paso Robles. Those brands include BV Coastal, Chateau St. Jean’s California line, Sterling Vintners Collection, Beringer Founders Estate and Sledgehammer, as well as Meridian and Blossom Hill wines.

Treasury expects to increase production in Paso Robles to 50,000 tons of grapes over the next few of years from the 35,000 tons expected this year, Driscol said. The winery will add about 10 jobs, most likely to be filled by existing TWE employees.

The company plans to sell its Paicines winery south of Hollister on California’s Central Coast and move its production to Paso Robles. The Paicines winery was once a source of popular Almadén jug wines and one of the facilities used to make Blossom Hill Wines, a brand that is popular in the United Kingdom.

Some positions will become redundant in the consolidation but may move to other facilities. The company also plans to sell some vineyards and land holdings, but Driscol told Wines & Vines those plans haven’t been finalized.

TWE expects to invest $40 million in its U.S. wineries between vintage 2016 and vintage 2018 to support its growth plan for premium American wines in Asian countries.

Treasury acquired the Acacia name and inventory but did not buy the Acacia winery and vineyard in Carneros. That property was bought by Peju Province Winery of Rutherford, which has rechristened it Liana Winery and will continue the focus of that site on Pinot Noir and Chardonnay.

Diageo sold Chalone Vineyards separately to Foley Family Wines.

The company is also consolidating production and vineyards in Australia and New Zealand, most recently selling the closed Mantua winery and vineyards to a dairy company.

 
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