In the wake of announcing its increased profit, Treasury Wine Estates (TWE) has revealed a new strategy to elevate the Penfolds brand.

The new approach will see Australia's most respected wine brand increasing in price across the range, supported by more availability of matured vintages and  a staggered release strategy.

Previously Penfolds was released in a double hit between March and May each year, with the junior part of its bin range launched first, followed by the stars of Grange, St. Henri, Bin 707 et al. In future there will be a second release in October and December taking advantage of seasonal retail madness and the idiosyncrasies of different markets, such as China.

Whether the new twin release policy will expand the number of well-healed consumers attracted to the brand remains to be seen. The increase in prices for Penfold's range does make sense in an industry where Australian wine has been undervalued for some time.

TWE chief executive David Dearie told media that the company was intent on growing its luxury segment, a policy that its latest profit increase should endorse.

On Friday (Feb 17) TWE announced a profit of A$91.7 million, up 2%, for the six months to the end of December 2011. This improved bottom line came in spite of a 6.2% decline in volume sold (1.1 million cases), in part because the company has been retreating from the terminally low price trade in the United Kingdom.

Meanwhile, Asia has been flourishing, with volumes and profits both rising sharply for the six month period.

Australia and New Zealand markets recovered some of their health after a few years of decline, with volumes up 1.7% and EBITS improved 7.3%.

Keith Stewart