The relaunch of the Penfolds Cellar Reserve range at the recent TFWA show as a travel retail exclusive was received very positively by buyers, according to Treasury Wine Estates Global Travel Retail General Manager Tom King.

 

 

Speaking to TRBusiness, King said the first of the company’s three objectives at Cannes this year was to share an update with its retail partners on how the company is progressing against its category development strategy (launched at TFWA Cannes 2014); also to relaunch the Penfolds Cellar Reserve range as a travel retail exclusive; and finally to share more information on its US portfolio.

 

 

He said: “Cellar Reserve has come about off the back of our insights programme, where the research identified that our shoppers in travel retail are, in fact, looking for wines that they can’t necessarily find in their domestic markets. They are open to trying new products in travel retail and that includes varietals, so the Penfolds Cellar Reserve range is a celebration of the art of wine making using boutique-size batches and combining both traditional and contemporary wine-making techniques.”

 

 

King says that these wines vary by vintage and varietals and are also made in smaller quantities than the rest of the Penfolds collection. The varietals are also not always those ordinarily associated with Penfolds, such as the Tempranillo and Sangiovese, which are also complimented by the more well known Pinot Noir, Cabernet and Chardonnay offerings.

 

 

He said Penfolds has identified ‘a compelling reason’ for launching these and initial sales where they have been launched already in Australia have been positive: “What we are doing is really bringing strong and high levels of activation to the shop floor to support this release, including videos from Peter Gago, Penfolds Chief Winemaker, which explain a bit more about the range and the varietals and provide wine shoppers with that opportunity to increase their knowledge and understanding of wines and different wine-making techniques.”

 

 

 

Asked whether this launch came out of Penfolds ongoing consumer research, King said: “There was a hypothesis that exclusives within the wine category in travel retail were something that shoppers were looking for and what the research did for us really was really underline that this is a compelling proposition.”

 

 

He said the company had already seen great success with Wolf Blass exclusives at similar price levels and the initial feedback on the Penfolds Cellar Reserve range has also been very supportive with ‘good levels of initial buying’.

 

 

“It is a departure from the Penfolds range in terms of how the brand is presented with a black label and it delivers stand out on shelf and again, it is a really luxury feel. The Coonawarra Cabernet which is a much more premium offering and retails at around the A$250 comes in this lovely gift box.

 

 

“Again, this supports another of the insights which we understand for wine shoppers in travel retail and it is like a gifting occasion, so we feel this really delivers amongst a number of the category drivers that we identified and a really compelling proposition.”

 

 

Asked for a guide to the recommended price range covering these new travel retail exclusives, King said: “The Coonawarra Cabernet is a 2012 one-off limited-edition release which retails at a recommended retail of A$250. Within the core range we have three red wines, so that is the Sangiovese, the Tempranillo and the Pinot Noir and they are recommended to retail at A$85 and the Chardonnay – obviously a white wine – with a recommended price point of A$55.”

 

 

 

King said that geographically a large part of Penfolds growth at both the premium and extra luxury end is coming out of Australia and the Asian markets: “I guess the advantage of being the biggest pure play global wine company is that we have such a broad and deep portfolio that enables us to tailor the offering to the passenger profile by location and by different channels.

 

 

“So whilst we are seeing strong earns at the very luxury end for the likes of Penfolds and Wolf Bass, we also have the portfolio that enables us to deliver compelling propositions for our consumers and customers who aren’t necessarily shopping at those sort of price ranges.

 

 

“So with brands like Matua and Lindemann’s we are seeking very high growth rates on those brands in Europe, in the Middle East and now we are having many more positive conversations with the US-based retailers and particularly around our US portfolio – but also the demand is there for the likes of Penfolds.”

 

 

Following the higher profile now enjoyed by Penfolds wines in Sydney Airport thanks to Allders in the past, then Nuance and now Heinemann, King acknowledges that the travel retail champions of the brand have largely been in Asia, but he says this presence is also migrating to other locations.

 

 

He said: “What we are seeing now is that there is momentum in the wine category and there is a lot more interest in the opportunity that exists within the wine category.

 

 

 

“We have put ourselves out there to take a lead role in driving the category growth and we’ve delivered on our word in terms of the investment that we are putting behind both MPD (marketing and product development), floor activation and staff education on the shop floor. This is important in such a complex and often confusing category and what we are seeing now is a lot more interest from retailers of all different sizes, shapes and regions.

 

 

“Actually, there is an opportunity now to drive growth on what previously could have been termed as the forgotten category within travel retail.”

 

 

King also acknowledges that its travel retail wine business is now a solid profits driver – as mentioned in Treasury Wine Estates last set of public results – as well as an important showcase for the company.

 

 

“The opportunity to showcase our brands in the right environment in front of our target consumers is significant. What we are doing in travel retail is very much aligned to our strategic road map within the company and transitioning the company from an agriculturally driven order taking business, to a brand-led marketing organisation. Travel retail obviously plays a huge role in building strong brands that resonate with consumers globally.”

 

 

Asked what the reaction been from retailers to this recent Penfolds Cellar Reserve range launch, King said: “The general response has been very positive once the full proposition has been explained and initial sales where we have launched have already been very positive.

 

 

“We have launched already in Australia in Sydney. We have a new multi-brand showcase with Heinemann in the newly renovated Sydney Airport and the Cellar Reserve Range is a key cornerstone of that. We are delighted with the way the product looks and the wines are absolutely fantastic – I can assure you of that.”