Treasury Wine Estates has made another move in the luxury California wine category, agreeing to acquire Paso Robles-based Daou Vineyards in a deal with a potential final price tag of $1 billion. The deal includes an initial payout of $900 million, with an additional $100 million if Daou reaches certain goals.
The acquisition includes the Daou brand, Daou Mountain Estate and hospitality site, four boutique luxury wineries and around 400 acres of vineyards in the Adelaida District of Paso Robles. Brothers Georges and Daniel Daou will remain involved in the business, with Georges as founder and Daniel as founder and chief winemaker.
Trying to Trade Up in Price Per Bottle
As reported by Shanken News Daily (SND), Treasury says the deal fills a key portfolio area in the $20 to $40 per bottle category, and strengthens its luxury portfolio in the $40 and up range. According to Impact Databank, Daou has been among the fastest growing wine brands in the U.S. market lately, expanding from 305,000 cases in 2019 to 590,000 cases last year. In addition to its namesake brand, the winery is known for its Cabernet Sauvignon-based Patrimony wines.
“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 TWE chief executive Tim Ford. “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.”
Ben Dollard, president of Treasury Americas, told SND, “Daou's impressive recent growth trajectory reflects growing connection with consumers and we feel there’s tremendous opportunity for the brand to continue to grow in the on- and off-premise.” He noted that the brand's distribution is highly complementary with Treasury's, and that “Paso Robles Cabernet, in particular, is doing really well, and that’s a great opportunity for us.”
The acquisition marks another play in Treasury’s premiumization strategy, following its $315 million acquisition of California’s Frank Family Vineyards in late 2021. While the company has had some success in recent years as it tries to transition away from value-priced brands, its Americas division has struggled and sales of its Australian wines in China took a big hit when that country imposed punitive tariffs on all Aussie wines.
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