Firmly rooted in a JD Edwards foundation, Treasury Wine Estates mixes industry expertise with next-generation functionality.
by Monica Mehta, August 2013
Several times a year, the winemakers at Treasury Wine Estates (TWE) give serious attention to tasting grape juice. In the United States, it starts with the first time a grape is picked during harvest and continues with periodic sessions until bottling from the company’s portfolio of 80 brands. It’s a highly subjective process, with each winemaker bringing a career’s worth of experience and expertise to judging the current—and future—quality of a grape.
Which grapes go into which wines will ultimately determine the finished quality of a bottle when it hits the cellar. The art of appreciating and understanding the potential of a grape is not only what winemakers practice—it’s what makes them exceptional. But it is an effort that takes on new character when supported by powerful enterprise systems that track millions of points of data about a vineyard, a selection of grapes, and the mix of juices that will ultimately become a bottle of wine.
At a recent roundtable with IT leaders and winemakers, the value of data integration throughout the winemaking process revealed how sophisticated winemaking has become—and how TWE is using data to support its relentless focus on quality.
“The more history we can gather, the more trending we can see, the better decisions a winemaker can make,” says Matt Johnson, director of winemaking at TWE. “Data is important because it helps winemakers or viticulturists ground their judgment.”
For more than a decade, Treasury Wine Estates, the largest publicly listed wine company in the world, has collected that data in an Oracle’s JD Edwards system, along with core enterprise resource planning (ERP) functionality that allows managers to track every aspect of wine production—from the growing of the grapes and the distribution of the bottles to the management of financial accounts and human resources operations. And leaders at TWE are looking to a closer relationship with Oracle to establish the company’s presence in social media, strengthening awareness of its brand among the next generation of consumers, and helping make the company the #1 maker of premium wine brands in the world.
Although enjoying a glass of wine is a simple pleasure, the business of winemaking is one of the most complex in the world. It involves cultivating and tending decades-old vines; growing and harvesting numerous grape varieties; crushing, fermenting, and blending the grapes; preserving, filtering, and bottling the wine; and finally, selling and distributing the finished product. Every aspect of the process changes, depending on variables such as weather, fruit quality, and the region of production. Along the way there is continuous quality testing, and the entire process is guided by strict outside regulations that differ from market to market. And unlike many manufacturing processes, effective viticulture and winemaking are equal parts science and art, involving intricate biochemical processes and the nuanced sensory evaluation of the finished product.
The capabilities in the Oracle software give our winemakers a real sense of ownership, because it’s an easy-to-use interface that allows them to record, access, and analyze all the data. Being able to get at that information is essential to making the right decisions, which, in the end, is vital to making good wine.
TWE owns more than 80 brands of wine globally—some of which have been around for centuries—including Beringer Vineyards, Castello di Gabbiano, Penfolds, Rosemount Estate, Wolf Blass, Chateau St. Jean, and Stags’ Leap Winery. The company manages more than 12,000 hectares of sustainable vineyards and more than 3,600 winemakers (or vintners); viticulturists; and sales, distribution, and support staff across 16 countries. It sells nearly 32 million cases of wine annually and has annual revenues of about AU$1.6 billion.
TWE uses JD Edwards EnterpriseOne solutions for a number of core business operations including financials, inventory, manufacturing, warehouse management and asset management, quality assurance, and procurement. But to expand the system beyond core ERP functionality, TWE joined a small group of winemaking companies to develop JD Edwards EnterpriseOne solutions customized for the needs of their industry. The results, the JD Edwards EnterpriseOne Grower Management and JD Edwards EnterpriseOne Blend Management solutions, enable users to report and track every aspect of growing grapes and blending wines—from monitoring the attributes of a block of land to tracing the source of every ingredient in a bottle. These solutions are integrated into the core ERP system so that information flows seamlessly between them and other areas of the business—such as financials and manufacturing. An integrated ERP system helps regional managers track and trace every aspect of the wines to comply with local regulations, as well as marketing and distribution regulations.
TWE uses JD Edwards EnterpriseOne Grower Management as a detailed agricultural management system that tracks approximately 100 attributes for every block of fruit that is grown, including row spacing, condition of the fruit, sugar content, and yield estimates. These attributes are constantly tracked and maintained, and the fruit is tested in the field and the lab to measure the approximate time of harvest and the type of wine the grapes will yield, which may change over time as the juice matures. In the field, growers record the status of the vines into a mobile device, and much of that data gets uploaded to the JD Edwards system. Winemakers can then use the information from previous years to identify trends such as when certain blocks ripen, or the effect of a weather event on that block.
The year Treasury Wine Estates’ Castello di Gabbiano started producing Chianti
“This approach helps us from a financial perspective,” says Johnson. “If we know that a vineyard is A-grade at the end of every year, we know that it’s a good one to invest in in terms of time, money, and resources.”
JD Edwards EnterpriseOne Blend Management helps the winemakers keep track of every lot of wine available. A winemaker creates a work order to change a lot of wine: for example, they may need to adjust acid or tannin levels, or blend vintages to achieve a consistent taste. Once information about the change is entered into the system, the attributes of the wine update in real time. That allows the winemaker to see the outcome of that change—such as impact on alcohol or sugar content—and further alter the blend process according to the desired end result. “Winemakers and viticulturists love data,” says Maggie Huffman, vice president of IT strategy, architecture, and innovation at TWE. “For them to have access to real-time and historical data is vital to the success of the winemaking process.”
Having a system that takes care of these calculations has many benefits. It saves time and prevents mistakes that used to be made when vintners created the change orders on paper. It also creates a record of previous blends, so winemakers can model a change and see the effects according to the history. It helps in prioritizing and scheduling the blend processes, enabling better resource planning. Being able to view all of the supply in one place enables managers to better plan supply chain processes so that the company can guarantee the quality and supply of its products to distributors and customers.
These benefits all help reduce the risks associated with winemaking. “It’s expensive to grow fruit and make wine, and it’s a medium that can be spoiled through bacteria, yeast, or oxidation,” says Johnson. “Being able to keep an eye on different levels and parameters helps ensure we are on top of any problems that occur.”
As each winemaker tastes the wines during the blending process, they assign grades based on the “notes” that they taste. These grades are recorded on a printout from the JD Edwards blend system and then input back into the system once the tasting is over. The TWE team is working on an iPad app that will collect and record these elements, which the JD Edwards system would capture and collate to come up with a weighted average that takes into account more-experienced winemakers’ palates, enabling a more accurate categorization of the wines.
Approximate number of cases of wine Treasury Wine Estates sells annually
“A lot of winemaking is about taste and what you call very subjective things,” says Johnson. “They become less subjective as a person’s got more experience, but they’re still subjective. Data helps to ground a winemaker in terms of concrete attributes such as sugar, acidity, and other parameters that can be measured.”
The reliability of the JD Edwards EnterpriseOne instances allows TWE to expand with new Oracle and third-party systems and achieve new capabilities and benefits. Along with the agricultural data system used by the growers, other systems that integrate with the ERP system include Oracle’s PeopleSoft Human Capital Management, Oracle Hyperion Financial Management, Oracle Business Intelligence Enterprise Edition, Oracle RightNow Cloud Service, Oracle Crystal Ball, and third-party sales and finished goods platforms.
“The level of integration we experience between our JD Edwards applications and our other Oracle applications allows us to get information in a much more timely manner, and has definitely improved the quality of the information and made it far more accurate,” says Huffman. “From an IT standpoint, the environment is cleaner and easier to support. The consistency of processes that are now embedded in the tools has also made us more efficient in terms of how we operate.”
Such integration has yielded a number of benefits. For instance, the integration of JD Edwards EnterpriseOne solutions with Oracle Hyperion Financial Management has consolidated and simplified financial reporting, increasing visibility and cutting the monthly close from five days to one. As another example, the integration with the Oracle Business Intelligence Enterprise Edition tool has provided TWE’s sales team with access to detailed sales data by customer, SKU, distributor, price point, and varietal, enabling them to tweak their strategies and processes accordingly.
Now that TWE has succeeded in developing efficient back-office and winemaking processes with the support of JD Edwards, the company is focusing on developing its interactions with its consumers. “People are passionate about wine,” says Rita Valois, former global chief information officer at TWE. “We want to enhance our consumers’ experience of our wines, to educate them so that it’s less intimidating and more approachable.”
Winemakers and viticulturists love data. For them to have access to real-time and historical data is vital to the success of the winemaking process.
To that end, TWE is integrating Oracle Social Relationship Management with its ERP system. Oracle Social Relationship Management will enable TWE to engage with consumers—including major retailers—and monitor and analyze customer interactions across the social media environment. The tool will be integrated with the JD Edwards EnterpriseOne system, allowing information to flow into areas such as sales, further enhancing the consumer experience. TWE is also developing a solution, using the Oracle platform, to enhance the consumer experience through tools that can help consumers learn about the wines, provide feedback, take a virtual tour of the vineyards, and perhaps even conduct a “virtual tasting.”
“Technology is allowing these engagements in a way that they have never been available before,” says Huffman. “The reality of the experience through technology can be really powerful. The virtual experience can be very, very palpable. Also, to have a two-way conversation with the consumer is very exciting for us. We are very excited to leverage Oracle’s expertise in this project.”
But the ambition to become the most celebrated wine company in the world all comes down to the quality of the wine. The better the tools vintners are given to support the complex process of winemaking, the better the chance TWE’s management has to fulfill its ambition.
“We have layers and layers of information,” says Johnson. “The capabilities in the Oracle software give our winemakers a real sense of ownership, because it’s an easy-to-use interface that allows them to record, access, and analyze all the data. Being able to get at that information is essential to making the right decisions, which, in the end, is vital to making good wine.”
Huffman says she is excited about TWE’s partnership with Oracle and looks forward to achieving more success with Oracle’s solutions in the future. “Oracle has made an investment in understanding the nature of wine and the wine consumer and continues to actively anticipate what wine companies will need to do next,” says Huffman. “Having a partner such as Oracle that understands our industry is pretty meaningful, and has allowed us to reap big rewards.”
Monica Mehta is a frequent contributor to Profit.
Penfolds: The Official Wine Supplier of ORACLE TEAM USA
Penfolds, a foundation brand of Treasury Wine Estates, is the official wine supplier of ORACLE TEAM USA. Penfolds’ collection of wines is served at all team events and hospitality areas across the globe. The partnership highlights Penfolds’ and Oracle’s shared values in achieving excellence and mastery in their respective fields.
“This is a proud partnership for both Penfolds and ORACLE TEAM USA,” says Penfolds Americas Brand Director Seth Hynes. “For Penfolds to be associated with the highest echelon of yacht racing is a natural fit. For ORACLE TEAM USA, it brings another luxury supplier that will elevate the quality of their hospitality experience.”