Blog: Fridges see cool returns for Treasury Wine Estates
Andy Morton | 16 July 2015
After a 2014 it'll want to forget, Treasury Wine Estates has some good news.
The Australian-based wine producer was in all sorts of trouble last year, after some well-documented write-downs in the US and significant net profits declines. Now, one of the strategies CEO Michael Clarke implemented to turn things around seems to be paying off. And it's all because of cheap fridges.
In June last year, Clarke announced a promotion in Australia that saw wine fridges offered at discount prices. The 32-bottle fridges had an SRP of AUD640 (US$470) but were available for about AUD200 to any consumer that bought six bottles of Penfolds. The company shifted an impressive 12,000 fridges.
Now an expanded promotion for a 120-bottle fridge is finding similar success, according to the Sydney Morning Herald. Retailers, the newspaper said, have been surprised at the amount of consumers willing to pay at least AUD500 on TWE brands so they can get two-thirds off the AUD3,000 “mega-fridge”.
Meanwhile, sales of the smaller fridge remain strong. “Even the average Joe coming in off the street is interested in the small one,” one retailer was quoted as saying.
Clarke, who is in the middle of a large-scale cost-cutting plan at TWE, may need more than fridges to get the company back on track. But it's a cool start.
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