Napa Valley’s Sterling Vineyards, pictured in 2023, is a Treasury Wine Estate brand that could potentially be sold as part of the company’s downsizing. “We are not commenting on specific brand timelines or future portfolio decisions,” a Treasury spokesperson said.
Brian L. Frank/Special to The Chronicle
Another major wine conglomerate is downsizing amid record declines in U.S. alcohol consumption and wine sales.
The Australia-based Treasury Wine Estates — the seventh-largest U.S. wine producer that’s best known for owning Australia’s Penfolds and historic Napa Valley wineries Beringer Vineyards and Beaulieu Vineyard — announced that it will divest a significant portion of its wine portfolio over the next few years.
The news comes one year after Constellation Brands announced it was offloading the majority of its wine portfolio to the Wine Group, now the second-largest U.S. wine producer. In recent months, numerous other U.S. wine conglomerates have sold assets, shut down wineries and laid off employees as the wine crisis deepens.
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During Treasury’s 2026 Investor Day on Thursday, the company presented a plan to turn around the company by focusing on luxury and lighter, low- and no-alcohol wines. Currently, Treasury owns 76 brands. It plans to cut that number by more than half, to fewer than 30. In doing so, it will prioritize its investment in just 10 brands, including Penfolds, Daou and Napa Valley’s Beaulieu, Frank Family Vineyards and Stags’ Leap Winery. Notably, Napa Valley’s Beringer, Sterling Vineyards and Etude Winery were not on the list.
There have been ongoing signs of trouble for Treasury: Six months ago, the public company announced a $450 million writedown of its U.S. business and suspended dividend payments to shareholders, causing its stock price to plummet. The new strategy comes just a few years after Treasury went on a major California winery acquisition spree. In 2021, the company paid $315 million for Frank Family Vineyards, then nearly $1 billion for Paso Robles winery Daou in 2023. Treasury is also set to complete a major, and likely costly, transformation of Beaulieu Vineyard this summer.
Frank Family Vineyards, pictured in 2023, is one of 10 brands that Treasury is prioritizing investment in as part of its new plan announced on June 4.
Juliana Yamada/The Chronicle
In April, former Chief Operating Officer Robert Foye — who left the company in 2019 but recently became a shareholder by investing 1 million Australian dollars (about $705,655 U.S.) — publicly criticized Treasury and called for an “accelerated sense of urgency” to navigate the current market challenges. Earlier this month, Foye told the Chronicle he felt Treasury was focused on “volume chasing and order taking, rather than building the business and really trying to focus on building the brands.” He also said he believed the company overpaid “by $600 million” for Daou. Share prices had dropped to below $4, which he said was “the same level the stock was at when I started (at Treasury) in 2014.”
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Foye said Thursday that he was encouraged by Treasury’s Investor Day presentation. “I thought overall, it was a relatively good, positive day,” he said, though he was critical of the company’s “lack of detail.”
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In an effort to reduce production volume and inventory — and reduce annual costs by roughly 100 million Australian dollars — Treasury said that over the next four years, in addition to selling some wine brands, it will also significantly reduce its vineyard acreage throughout California by selling vineyards it owns, ending vineyard leases and not renewing grape contracts.
The company will also consolidate the production of Frank Family and Stags’ Leap at its St. Helena winery, which it plans to transform into a luxury production hub. Treasury did not specify which vineyards or wineries it will divest, but Foye surmised it will likely be wine brands priced at less than $20 per bottle, and vineyards growing grapes for such wines.
The announcement has already had a positive impact on Treasury’s stock, which dropped by more than 50% in the past year. It was up 13% to $4.66 a share in the past 24 hours. One year ago, shares cost $8.22.
The future of two of Treasury’s legacy Napa Valley brands — Sterling, which was severely damaged in the 2020 Glass Fire and reopened following a massive renovation just three years ago, and Beringer, founded in 1876 — is unclear. Will Treasury look to sell them? While the market is soft, the history, name recognition and real estate of both would likely be compelling to other buyers. “Beringer and Sterling play important roles in the U.S. market and will continue to support customer and consumer needs during the transition period,” a Treasury spokesperson said. “We are not commenting on specific brand timelines or future portfolio decisions.”
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To Foye’s point, some of their wines are in a lower price range, but each winery also produces bottles in the luxury tier. “I think (Treasury) was purposefully kind of a little vague, because they don’t have a final plan,” he said.
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