Endeavour Group, the Australian retail drinks and hospitality business, has announced a strategic transformation of its Pinnacle Drinks business. The asset-light, customer-led restructuring will refocus the portfolio on brands and regions that generate the strongest returns.
As part of the strategy, the company will cut its own grape production by more than 80%, resulting in approximately 99% flexible sourcing of purchased bulk wine and grapes from the viticulture market. Endeavour Group plans to reduce capital intensity and streamline production by consolidating its winery operations from seven sites down to three.
Following a premium portfolio review, the firm will exit or sell non-core agricultural and winery assets while retaining its brands. It will divest the vineyards and physical assets of the Chapel Hill, Riddoch Coonawarra and Krondorf Barossa brands. Chapel Hill operations are scheduled to close at the end of June. Additionally, a single high-scale packaging facility will be kept at Vinpac Angaston, while the Vinpac McLaren Vale bottling facility is set to close later this calendar year. Endeavour Group is also seeking a new owner for the Oakridge brand and operation.
Commenting on the move, Endeavour Group managing director and chief executive officer Jayne Hrdlicka said: “Today’s decisions reflect a clear choice to refocus Pinnacle on its primary role – serving our Retail businesses and the customers that drive growth”.
Source: Endeavour Group
