Inside the soul of a lion: Treasury’s $1.6 billion bet on the unicorn that is Daou

The Daou property is a beautiful place.

At the end of 2023 Treasury Wine Estates – owner of (deep breath) Penfolds, Wynns, Wolf Blass, Pepperjack, Coldstream Hills, Devil’s Lair, Seppelt, Saltram, Beringer, 19 Crimes, Castello di Gabbiano, Stag’s Leap and more – coughed up AU $1.6 billion to buy a winery that only started in 2007. As if Treasury didn't already have more wineries and wine brands than it knew how to handle.

This was either one of the strangest over-spends in corporate history or the winery, or wine brand, or wine location that it bought must be something stupendously special. From nothing other than its land value to AU $1.6 billion in 16 years is – in the wine industry, no less – an eye-watering rate of value build.

The winery that did all this value-building is called Daou. It sits atop a mountain and each morning, or most mornings, the winery staff drive into the mist at the bottom of this mountain and then wind their way up above the clouds, to where the winery, cellar door and vineyards rest. This mountain is in Paso Robles, in California, in the Adelaida AVA; it sits roughly half-way between Los Angeles and the Napa Valley, amid the Santa Lucia Mountain range, not far from the coast of the Pacific Ocean, not far from the Los Padres National Forest. If you were to stalk these Santa Lucia lands day and night you might encounter bobcats, deer, mountain lions, coyotes, foxes, elk and wild boar, for all are active in these parts, as indeed are hawks, owls and woodpeckers.

The winery is called Daou, the mountain on which this winery sits is now called Daou Mountain, and the people who established it in 2007 are brothers Georges and Daniel Daou. The Daou brothers grew up, or at least started their life, in Beirut. In 1973, during the Lebanese Civil War, a missile hit their home. This story is neither apocryphal nor near-miss; from this blast, shrapnel shot into the lungs of Georges, and put him into a coma. He stayed in this coma for two days. Daniel suffered permanent nerve damage to his face. On the events of this blast, Georges was quoted in Wine Enthusiast magazine as saying, “I went to bed as a child, but I woke as a man”.

The family fled to France and then, later, the brothers moved to the US, to San Diego, to study engineering. They did this on the last of their family’s money. This all proved to be rich fertiliser for the soil of the American Dream. They saw an opportunity in healthcare information technology. They started a company, called Daou Systems, and grew a fortune, and cashed out. From the earliest days of their early teenage years, in France, the brothers – particularly Daniel – had fostered a love of wine, vineyards and land. They built Daou Vineyards.

Atop a mountain.

And on this mountain they did not build a castle but instead built a winery and grew vines in deep calcareous clay soils, on beds of limestone; light-coloured clays that crack when it’s dry and look when they do like the rubble of a house, in there below the green leaves, just down from the fruit.

And once these vines had grown and been proven they built a wine, a flagship, a legacy.

And on this legacy wine they placed the name: Soul of a Lion.

This name and this wine – made with tannic, bomb-proof cabernet sauvignon – is a tribute to their father, who got the Doau brothers out of the bombed-out house in Beirut and took them to France and made possible the dream that an Australian company named Treasury has just bought out.

The main logo or display of the word Daou, which gets more or less elaborate depending on the tier of wines it sits on, is the one-word of Daou, written in red lettering, placed on a white-paper label. Up to the point when Treasury walked in the door Daou and Penfolds held no connection; now, on a shelf, they look like brothers.

Daou, it is said, is – according to the press release issued at the time of Treasury’s acquisition – the “fastest-growing luxury wine brand in the United States”. Treasury, it is said, has been looking for some time for an opportunity to create another Penfolds. Daou is this chosen one. Daou – who wrote, I’m told, the book on direct marketing and who understand, in the way only the new-super-rich can, the mind of the luxury market better or as well as anyone – has already conquered the luxury market of the United States. The best or most sought-after wines of America have generally, historically, been hoovered by the American market itself. Treasury wants Daou to break this historic precedent. Treasury wants Daou to be the American wine, set sail from the height of its mist-skirted mountain, that breaks the shores of the Pacific, and conquers the luxury world.

Every year, for the past few years, the viticulturists at Daou have set clouds of lacewing insects free – using drones as their distributors – in an attempt to control, via native and natural predators, the spread of leafhopper pests. I know this because I arrived at Daou on a media tour bus one warm-but-rapidly-cooling Spring evening recently. The focus of this trip was the myriad topic of sustainability, in a Californian context. At Daou that evening we drank wine – most of which was enthusiastically oaked, shall we say, though the ‘standard’ cabernet was a gorgeous drink – and talked as a group about the birds and the bees or, more accurately in this instance, the owl boxes installed around the Doau vineyards (a barn owl family can eat up to 3000 rodents per year, according to the UC Davis) and raptor perches, both of which help keep gophers and other rodents from causing too much damage. Daou also employs bee hives and – such a cute name – ‘bug hotels’ to, again, help eliminate pesticide use. Daou has SIP (Sustainability in Practice) certification. In 2024, Daou turned over to 100% renewable power for all Daou operations – vineyards, winery, and hospitality (using both on-site solar and renewable power from the grid, with the aim to “build out” its on-site solar). Daou is in the midst of organic certification for all its estate vineyards.

There are a lot of environmental targets in both California and the world at large that are aimed at 2040 or even at 2050. Daou, the fastest-growing luxury wine brand in America, plans to be Net Zero by 2030. It’s now trialling electric tractors, driven by remote control.

The slopes of Daou mountain are so steep, they feel powerful. It would be a good place to land a helicopter, or for mountain lions to mate, or to build a fortress. The vibe of the place is that it’s a playground for the rich, the famous, the aspirational and the arrived. The Paso Robles area, pre Daou, was largely known for its wines made with Rhone grape varieties. It still is. Daou, on its unique patch, bought in cabernet, put it on top limestone, and scooped up a pool of treasures. There’s an argument in wine, ultimately and especially at the top end, that you’re drinking a destination. The destination is, crucially, both literal and figurative. Daou is the destination. Treasury has arrived. This is where we are. A bomb blast, a story, a dream and a billion. Drink in the view.


Daou Soul of a Lion 2021 review.
Daou Reserve Cabernet Sauvignon 2022 review.
Daou Dessert Red 2019.

The view from Daou Mountain. All images: Campbell Mattinson.

Campbell Mattinson

This article was written by Campbell Mattinson, founder of The Winefront and mattinson, and former chief editor of Halliday.

When you pick up a wine book and see thousands of wines with 95 point and above scores, it’s hard to know which of these wines to choose. Mattinson guides you through this maze, leading you to the best Australian wines, the best wine stories, the best wine producers, the best value wines, the most prestigious wines and simply, to the best tasting wines.

Mattinson has been a photo-journalist since 1987. For the past 25 years he’s been helping people find the world’s best wines. He’s the only Australian wine journalist to have won the Australian Wine Communicator of the Year Award more than once. He is a past winner of a prestigious Louis Roederer International Wine Media Award, and is the author of the award-winning book The Wine Hunter.

https://www.campbellmattinson.com
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