Constellation Brands is one of the world's leading premium wine companies, and now also a major force in US beer as well as spirits. Long-established as a wine producer, the company grew 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 distributor which turned Mexico's Corona Beer into the best-selling US import. Following the buyout of AB InBev in 2013, Constellation's beer division became America's #3 brewer (see separate profile). Other important purchases 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 also controls a small but significant collection of premium spirits led by Svedka vodka.
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|Clos du Bois||Alice White|
|Paul Masson||Arbor Mist|
Adbrands Weekly Update 5th Jun 2017: US wine and beer group Constellation Brands was reported to have made an approach to acquire its spirits-centric rival Brown-Forman, owner of Jack Daniel's and other brands. A combination of the two companies would create a global giant with combined sales of around $11bn, overtaking Pernod-Ricard (with approx $10bn). However, Brown-Forman apparently rebuffed the offer saying it is not for sale. Most of the remaining potential takeover targets in the global drinks market are family controlled, making unsolicited acquisitions hard or even impossible to pull off.
Adbrands Weekly Update 6th Oct 2016: Reinvigorated by the strong growth of its Corona Extra beer business in the US, Constellation Brands put its slower-growing Canadian wine business up for sale. It had been considering an IPO of the business, but lacklustre markets have derailed that plan. Instead it is seeking a private equity buyer. Price tag is expected to be around $1bn. Assets include the Jackson-Triggs, Inniskillin and other wineries that joined the group a decade ago with its purchase of Canadian wine company Vincor. It sold off most of its international wine brands in 2010 (to what is now Accolade Wines), but will retain a few key assets such as New Zealand's Kim Crawford alongside its substantial US wine business, anchored by the Robert Mondavi brand. Also this week, Constellation was victorious in an auction for craft spirits distiller High West Distillery, beating off rival bids from Moet Hennessy and Pernod-Ricard. Brands include Rendezvous rye, American Prairie bourbon and Campfire blended whiskey. Constellation enjoyed a 17% increase in revenues for the latest quarter, ending September, and a 27% jump in operating income.
Adbrands Weekly Update 7th July 2016: US drinks group Constellation Brands got off to a cracking start in the first quarter of its new financial year. Strong sales for Corona Extra and other Mexican beer brands, as well as for newly acquired Ballast Point craft beers and its wine portfolio resulted in a 15% jump in revenues for the three months to May, while operating income was up 21%.
Adbrands Weekly Update 25th Feb 2016: Figures from market watcher Impact Databank show that Pernod-Ricard's Absolut brand has been toppled from its longtime position as the top-selling imported vodka in the US, and the overall #2 behind Smirnoff, by Constellation's Svedka, also originating from Sweden. Svedka's US volumes were up 3% last year to 4.2m cases, while Absolut's slipped 2% to 4.1m. Absolut could face a further threat this year from US-made New Amsterdam vodka, which jumped 25% in 2015 to 3.7m cases. Smirnoff continues to dominate the vodka market with a little under 10m cases.
Adbrands Weekly Update 19th Nov 2015: Craft beer is more valuable than gold in the US right now. Constellation Brands, which owns Corona Extra and other Mexican beers in the US, has agreed to acquire San Diego's Ballast Point Brewing, makers of Sculpin IPA, for a spectacular $1bn, more than ten times the company's revenues last year. Volumes are on course to double this year to almost 4m cases. "Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the US beer market in the last five years," said Constellation CEO Rob Sands. "Ballast Point has certainly been a key driver of that growth. Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business."
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