Foster's Group realigns U.S. wine business, posts small profit

Foster’s Group, Melbourne, Australia, posted a net profit of $315 million in U.S. dollars for the year ended Dec. 31, 2009. In a constant currency exchange rate, the company posts a 0.5 percent profit, as reported in its mid-year report. Overall, the company reported a 2.2 percent decline in volume to 80.1 million 9-liter cases.

Its North American wine business saw overall 0.2 percent decline in volume. Foster’s Group also reported declines in on-premise channel, channel shift to grocery at discounted prices and a return to growth in Canada. In the region, the company saw modest growth in its North American wine portfolio, which was driven by innovation and its value wines, said Stephen Brauer, managing director of Americas, in a statement.

In addition, the company led aggressive promotional activity across all North American channels, it said. Consumer trends observed by the company include trading down across all price brackets, continued channel shift from on- to off-premise and the Millennial generation embracing the wine category at an early stage, which is driving growth at high price points, Foster’s Group said.

To keep in line with the trends, Foster’s announced it will focus on its core brands, such as Beringer, Chateau St. Jean and Wolf Blass, as well as its core markets, which include Canada, the New York metro area, Massachusetts and Florida. The Florida market presented 10.5 percent growth for the company, according to its report. Foster’s Group also saw a 5 percent increase in the sales of its California-sourced wines this year.

In the North American market, the company plans to reshape and emphasize the premium nature of St. Clement, Penfolds, Stags Leap and Etude wine brands in 2010. Additionally, the company plans to accelerate innovation pipeline in high-growth segments, including emerging brands such as Cellar No. 8 and Colores Del Sol, an Argentinian wine.

Internationally, Foster’s reported its continental Europe volume increased 25.7 percent, while volume in the United Kingdom and Ireland decreased 7.5 percent, said Angus McKey, chief financial officer, in a statement. In its native Australia, the company’s beer, cider, spirits and ready-to-drink brands continued to perform. However, its wine business suffered a 0.9 percent decline in net sales revenue in Australia and New Zealand. The company also continues to increase its focus in Asia, and reported good volume growth in China, Hong Kong, Taiwan, Singapore and Malaysia, despite an overall 11.4 percent decline in volume in the region.

 Did you enjoy this article? Click here to subscribe to Beverage Industry.  

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

Top Beverage Flavors of 2014

Traditional flavors make up a large portion of beverage-makers’ selections, but tropical and exotic ones aren’t trailing too far behind. That’s according to research by BNP Media’s Market Research Division for Beverage Industry’s 2014 Product Development Outlook survey. Also see what's anticipated for top-selling flavors of 2015.

Click here to view the infographic in PDF format.

2/18/15 2:00 pm EST

A Healthy Future: Analyzing the latest health and wellness trends in the beverage market

The beverage marketplace continues to evolve to meet new trends and regulations. Our expert speakers will share with you their insight on what health and wellness topics will be paramount for the future success in the beverage industry.

Podcasts

Gert van Manen, president of iTi Tropicals Inc., shares his insights on the U.S. coconut water market. Citing research from Krueger Food Laboratories, he also supplies information highlighting the difference between products that declare their added sugars and those that do not.

Beverage Industry Magazine

BI February 2015 cover

2015 February

The February 2015 Beverage Industry includes a cover story on Bai Brands, as well as articles about calorie moderation, sparkling and premium wines, and more. Check it out today!

Table Of Contents Subscribe

Wine Trends

Which trend will have the most positive impact on the wine category in 2015?
View Results Poll Archive

THE BEVERAGE INDUSTRY STORE

cleaning-in-place-dairy-foo.gif
Cleaning-in-Place: Dairy, Food and Beverage Operations, 3rd Edition

This book addresses the principles of cleaning operations, water supply issues and the science of detergents and disinfectants.

More Products

Beverage Insider eNewsletter

Are you an Insider? Subscribe to Beverage Industry’s weekly e-newsletter to receive news headlines, new product information and magazine highlights.   

STAY CONNECTED

facebook40 twitter    youtubelinkedgoogle+ icon 40px

Webinars

Beverage Industry Webinars are an easy, effective and convenient way to get educated and informed on the latest industry trends and topics. All Webinars are FREE unless indicated. For more information, check out our Events page!