November 2, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Melbourne-based wine giant Treasury Wine Estates (TWE) has accelerated its premium and luxury portfolio in a big way, announcing its acquisition of U.S.-based DAOU Vineyards – the fastest growing luxury wine brand in U.S. trade over the past year – for a total consideration of $1 billion. 

In 2021, TWE set out a strategic plan to become the “world’s most admired premium wine company” through “bold decision making and innovation”… and growing its business “using a number of distinctive competitive advantages.”

Over a number of months the company put these intentions into action. In November 2021, TWE acquired Frank Family Vineyards (the third-oldest vineyard in Napa), including a historic winery, brand, and vineyards, for US$315 million, and three smaller wine estates in Bordeaux – Châteaux Belle-Vue, Gironville, and Bolaire – to complement its already-owned Chateau Cambon la Pelouse, bought in 2019. 

Further, as the company aspired to gain market share in the premium wine space, in March 2021 it also divested four of its lower-end brands to Wine Group for $100 million, giving space for the Frank Family Vineyard to join other luxury brands such as Chateau St. Jean, Beringer, Acacia, Beaulier, Sterling, and Stag’s Leap.

Now, TWE is adding DAOU Vineyards to its holdings for an upfront consideration of $900 million plus an additional earn-out of up to $100 million, giving the Australian wine giant a greater presence in key growth markets such as the U.S. 

“The U.S. is the world’s largest wine market and we’re beyond thrilled to add DAOU to our portfolio, cementing our position as a global luxury wine leader. This is a transformative acquisition that will accelerate the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences,” said Tim Ford, CEO, Treasury Wine Estates. 

Founded by brothers Georges and Daniel Daou in 2007 in the winemaking region of Paso Robles, California, DAOU includes the DAOU brand, the DAOU Mountain Estate and hospitality site, four boutique luxury wineries, and 400 acres of vineyards in Paso Robles that are recognized throughout the industry for the production of the company’s award-winning Cabernet Sauvignon-based Patrimony wines.

“DAOU is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for DAOU to become the next brand with the international scale and luxury credentials of Penfolds,” said Ford. “With DAOU, we will be well-positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution.”

TWE expressed how DAOU is highly complementary to its existing upper-luxury price point portfolio, and fills a key portfolio opportunity for TWE in the $20-$40 range as well as in the $40+ range. 

Over time, the long-term goal is to leverage TWE’s global marketing and distribution expertise to bring the DAOU portfolio, winemaking philosophy, and unique luxury consumer brands to new international markets. Toward this end, TWE stated that it will explore sourcing opportunities outside of the U.S. for DAOU as part of this strategy. 

“We’re really excited about the opportunity for the wine category to engage new consumers, and particularly to bring consumers into our portfolio,” said Ben Dollard, president Treasury Americas.  

“DAOU has done an incredible job with regards to the experience at DAOU Mountain as well as engaging with younger wine consumers across the country, and we see a very significant opportunity to take that experience globally.”

Georges and Daniel Daou agree that the next step for DAOU Vineyards ultimately lies overseas, stating, “The last frontier has always been international, and as part of the Treasury Wine Estates portfolio, we have unlocked the potential to be amongst the highest-end wines for consumers to enjoy globally. In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future.”

“Both companies are change leaders and by joining forces, we will continue to boldly disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world.”

After securing U.S. antitrust approval, this major acquisition is expected to close by the end of this year, after which Georges and Daniel Daou will remain highly involved in the business in the roles of founders, and in the case of Daniel Daou, chief winemaker.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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