Constellation Brands : advertising & marketing profile

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Constellation Brands is the world's leading premium wine company, and now also a major force in US beer as well as spirits. Long-established as a wine producer, the company expanded dramatically during the 1990s as a result of a string of acquisitions. Initially these were concentrated in the US, and included what was then Crown Imports, the beer distributor which turned Mexico's Corona Extra into the best-selling US import. Following its buyout from AB InBev in 2013, Constellation's beer division has become America's #3 brewer behind AB InBev and MillerCoors (see separate profile), and beer is now the group's biggest revenue stream. Other important past purchases have included America's Robert Mondavi wines in 2004, Vincor of Canada in 2006, and Clos du Bois and other US wines from Fortune Brands in 2007. A sortie into international markets wasn't quite so successful. The group acquired UK drinks distributor Matthew Clark in 1998, followed by Australia's foremost producer BRL Hardy in 2003. The subsequent slump in UK and Australian sales prompted the group to sell off a controlling stake in those units in 2010, to form what is now Accolade Wines. Constellation sold its remaining 20% stake in 2018, and has since sold off several lower priced or lower volume US wine brands. Constellation also controls a small but significant collection of premium spirits led by Svedka vodka. In 2017, it was among the first drinks producers in the US to bet big on cannabis-infused beverages with a minority investment in Canopy Growth.

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Constellation Brands website

Brands

Clos du Bois Alice White
Hardys Svedka
Paul Masson Arbor Mist
Robert Mondavi Ruffino
Cook's Champagne Ravenswood
Woodbridge Simi
Franciscan Estates Black Box

Recent stories from Adbrands Update:

Adbrands Daily Update 4th Apr 2019: Confirming several weeks of rumour and speculation, Constellation Brands announced the sale of around half its wine portfolio by volumes to E&J Gallo for $1.7bn. In a continuing shift away from its heritage as a cheap wine producer, Constellation wants to focus on beer, spirits and a smaller wine selection concentrated on brands that lead their individual segments. Labels moving to Gallo include high volume Black Box, Wild Horse, Mark West and Ravenswood, as well as high end Clos du Bois. A full list has yet to be published. Staying at Constellation are Robert Mondavi, Prisoner Wines, Kim Crawford, Meiomi, SIMI, Schrader and Mount Veeder. The sale accompanied strong financial results for Constellation, with revenues up 9% to $8.1bn, while net income soared by 50% to $3.4bn as a result of a huge gain on the value of the group's minority investment in Canopy cannabis. Constellation's own operating income rose by a more modest 5% as strong growth in beer was offset by declining performance by the wine portfolio.

Adbrands Weekly Update 18th Oct 2018: After transforming US drinks company Constellation Brands with the purchase of Corona Extra and a more recent bet on cannabis-infused beverages, CEO Rob Sands will hand over that role in March 2019 to Bill Newlands, who became president & COO at the beginning of this year. Sands will succeed his brother Richard as executive chairman. Richard was CEO from 1993 to 2007; Rob from 2007 until now. Newlands will be the first non-family member to lead the company, which was established by their father Marvin Sands in 1945.

Adbrands Weekly Update 16th Aug 2018: Constellation Brands, owner of Corona beer, Robert Mondavi wine and Svedka vodka among others, is pushing aggressively into the promising cannabis beverages category. It already owns a 10% stake in publicly quoted medical cannabis producer Canopy Growth. With cannabis already legal in several US states, and in Canada from later this year, Constellation is one of several drinks companies that see a big future in weed-infused beverages. It has now agreed to purchase a further parcel of shares in Canopy to take its holding to 38% as well as options to acquire majority control at a later date. Price for the purchase is around $4bn.

Adbrands Weekly Update 24th May 2018: Constellation Brands promoted Jim Sabia, who has been heading marketing for the beer division, to group EVP & CMO across both divisions of beer and spirits & wine.

Adbrands Weekly Update 5th Apr 2018: Solid growth from Corona Extra and other Mexican beers offset lower sales of wine and spirits for Constellation Brands in the year ended February. Group revenues rose 3% to a new high of almost $7.6bn, while tax reforms prompted a 53% jump in net income to $2.3bn. However the sale of the group's lower-priced Canadian wines during the year resulted in a 13% decline in total shipments and 6% in revenues from that division. That was offset by a rise of 9% in beer volumes and 10% in related revenues. Strongest growth came from the Modelo brand family, with depletion volumes up an extraordinary 18% to over 110m cases. Lead brand Corona Extra was up 8% to 145m cases.

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