The industry is now rebounding with the rise of low-alcohol beverages catering to the working population, and the easing of trade barriers, are key factors driving its growth. Two of the best growth stocks to buy now from this sector are
Treasury Wine Estates Limited (ASX: TWE)
Treasury Wine Estates Limited (ASX: TWE) has entered into an agreement to acquire a 75% stake in Ningxia Stone & Moon Winery Co. Ltd for RMB 130 million (~A$27.5 million). Situated in the esteemed wine region of Ningxia, China, Stone & Moon’s assets include 43 hectares of luxury vineyards, a modern winery with expansion potential, and a cellar door. This acquisition aligns with TWE’s strategy to invest in high-value vineyard and production assets to bolster its luxury wine portfolio. The move complements existing third-party sourcing, enabling a scalable production model for Penfolds’ China-focused portfolio. TWE is among the growing companies to invest in as it plans to further develop the site as a local brand home for Penfolds, enhancing its position as a leading luxury wine brand in China. Completion is expected in 2H25, subject to customary conditions, with an option to acquire the remaining 25% after five years.
Operationally, TWE delivered strong performance in 1Q25, achieving double-digit organic growth in group NSR (net sales revenue). The Penfolds brand continues to drive momentum, led by robust performance in Asia and Australia, with customer re-ordering and depletions in China tracking in line with expectations, particularly during the Mid-Autumn Festival. Management reaffirms low double-digit EBITS growth for Penfolds in FY25. In the Americas, realigned distributor arrangements are expected to accelerate luxury portfolio performance from 2Q25 during the holiday period. Globally, the broader portfolio is performing as expected, with NSR growth consistent with the prior corresponding period. Guidance for FY25 EBITS remains in the range of $780–810 million, with top-line growth underpinned by sustained momentum in the luxury segment. This year marks the conclusion of TWE’s four-year 2025 Game Plan, which helped the company navigate challenges such as the pandemic, Californian wildfires, and shifting trade dynamics, while positioning it as a stronger, more diversified global business.
TWE has now launched its new strategic framework, with a refined purpose of “Boldly Cultivating” value through brands, innovation, sustainability, and experiences. The updated vision aims to solidify its standing as the world’s most desirable luxury wine company, supported by strategic pillars and a cohesive cultural identity. This refreshed roadmap underscores TWE’s commitment to leveraging its global capabilities for long-term growth in the luxury wine market.
Australian Vintage Limited (ASX: AVG)
Australian Vintage Limited (ASX: AVG) is a leading global player in the wine industry, focused on consumer-driven innovation and international expansion. With a strong export-oriented business, approximately two-thirds of its sales come from global markets, particularly in Asia and the Americas. The company is one of the potential growth companies having successfully positioned itself as a leader in the growing no- and low-alcohol wine segment, with its efforts driving a 20% revenue increase in this category. AVG has also built long-term, trusted relationships with growers, suppliers, and customers, and its industry-leading ESG credentials, highlighted by its B Corp certification, set it apart in an increasingly sustainability-conscious market.
Despite all the challenges facing the Australian wine industry, such as disruptions to supply chains, cost inflation, extreme weather, and changing consumption trends, AVG has taken proactive steps for long-term growth. Diversification of export markets, product innovation, expanding key brands, driving cost efficiencies, and tight inventory management are some of them. The company posted a robust 25% EBITS growth to $13.2 million for 2024 with revenue at $261 million. These positive outcomes indicate the resilience and sound operational execution of AVG, even in tough times. Looking forward, the strategic plan of AVG targets to return to cash flow neutrality by FY25. Projected free cash flow is expected to increase to $10 million by FY26 and to $20 million by FY27.
AVG's future growth will be driven by continued investment in core brands, innovation, and expansion into new markets. The company will target the next generation of wine consumers, further capitalizing on its leadership in the no- and low-alcohol wine segment. AVG is also focused on leveraging its modern production facilities to support planned growth, while remaining open to industry consolidation or partnership opportunities to maximise asset utilisation and earnings. With a seasoned management team, strategic brand investments, and a clear focus on sustainability and efficiency, AVG is well-positioned for continued success in a dynamic global market.
Source: Company’s Report
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