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Constellation’s Wine And Spirits Sales Up 6% In Q3, Despite Tough On-Premise Climate

January 9, 2013

Constellation saw 6% organic growth across its wine and spirits portfolio in the three months through November, with Woodbridge, Rex Goliath, Kim Crawford, Ruffino and Mark West (acquired last July from Purple Wine Group for $160 million) driving gains. Innovations like Simply Naked and Thorny Rose have also provided momentum lately. For the nine months through November, Constellation’s overall net sales were up 3.7% to $2.1 billion. U.S. shipment volume rose 4% to 38.7 million cases.

In a conference call this morning, Constellation CEO Rob Sands said the company is poised to benefit from taking full control of Crown Imports, its former U.S. joint venture with Grupo Modelo—a $1.85 billion deal that’s expected to be finalized in the next three months. Crown’s net sales growth slowed to 1% in Constellation’s third quarter due to “second quarter wholesaler buy-in of product in advance of planned price increases and the loss of St. Pauli Girl brand volume.” (St. Pauli Girl moved from Crown to Anheuser-Busch last June.) Modelo Especial, which crossed 40 million (2.25-gallon) cases in 2012, continues to lead the charge for Crown, and is drawing in more general market consumers on top of its Hispanic consumer base. Crown is also enjoying growth on Pacifico, led by that brand’s increasing on-premise draft business, and Sands added that the group will expand its U.S. distribution of Carlsberg-owned Somersby cider in the early part of this year.

Turning to general market trends, Sands said there was a slowdown in the on-premise across all beverage alcohol categories in the fourth quarter of calendar 2012, with the segment sliding by about 3%, perhaps related to the overhang of the fiscal cliff during that period. But he noted the industry outlook remains healthy overall, with “very strong trading up” being seen across the wine category in particular.

 

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