Treasury Wine Estates downsizing California assets
Global wine titan Treasury Wine Estates announced this month that it plans to significantly reduce its California assets.
Treasury will divest and exit leases in Napa Valley, Sonoma and the Central Coast and sell its wineries in Paso Robles and San Luis Obispo, materials shared with investors show. Production at Frank Family Vineyards in Calistoga and Stags’ Leap Winery in Napa will be consolidated into the St. Helena Winery operations, which will become the main U.S. luxury wine production hub. The Sonoma Bottling Center will be downsized as well.
Vineyard exits and winery consolidations will take place over a roughly four-year period in the United States, the company said.
Broadly, in California, Treasury said it plans to overhaul its supply chain end to end and rebalance its long-term supply and demand.
“We’re responding proactively and responsibly by aligning our footprint and asset utilization to future demand expectations while continuing to protect the quality, flexibility and reliability our customers expect,” Kerrin Petty, chief supply and sustainability officer at Treasury, said in a June 3 news release. “The transformation of our supply chain directly supports our investment in the brands and opportunities where we see the strongest long-term growth potential, while supporting a healthy balance between supply and demand in the industry over time.”
Treasury’s cuts come as the wine industry is facing significant challenges with wine consumption at historic lows. Grape growers and winemakers are shutting their doors or are being forced to adapt their products and amend their marketing plans to accommodate changing consumer demands.
The California changes are a part of the Australia-based company’s large-scale brand overhaul. Treasury will focus on three parts of its business: luxury red and white wines and “modern refreshment” – meaning “lighter, flavor-led wine experiences,” company investor materials said.
The company will reduce its wine labels from 76 to less than 30 over a five-year period.
Through this overhaul, it plans to cut costs by around $71 million over the next three years. The company’s earnings outlook as of earlier this month were between $339 to $346.5 million for fiscal year 2026 and at least those levels for 2027.
As of Monday afternoon, Treasury was valued around $2.8 billion.
The company will focus on expanding its luxury wine brands in California. Treasury acquired DAOU Vineyards in Paso Robles in 2023 for up to $900 million, company records show. It purchased Frank Family Vineyards in 2021 for $315 million, a company news release said.
Treasury has nearly 25,000 acres in vineyards and winemaking facilities across the globe, with over 6,600 acres in California. The California acreage is concentrated in Napa Valley, Paso Robles, Sonoma County, Lake County and Central Coast.
