Interview: Constellation’s Incoming CEO, Bill Newlands, Speaks On The Opportunities AheadOctober 18, 2018
In a major move late yesterday, Constellation Brands announced that its current president and COO, Bill Newlands, will take over chief executive duties from Rob Sands, effective next March, with Sands becoming executive chairman. With the transition, Newlands will become the first Constellation CEO from outside the Sands family. He takes the helm during a heady time for Constellation, which has seen its market value rise from $6.3 billion in 2012 to $43 billion today, following a string of acquisitions across the wine, spirits, and beer businesses. Most recently, Constellation made another bold move with its $4 billion investment in Canadian cannabis producer Canopy Growth. SND managing editor Daniel Marsteller caught up with Newlands to discuss his new appointment and the future of Constellation.
SND: As the first non-Sands family member to lead Constellation, how does that inform your approach to your new role?
Newlands: When you’re following in the footsteps of the three CEOs before you and they all have the last name Sands, it’s a much different situation than it would be in a lot of companies of this size. I would note that both of the Sands will continue to remain involved from their positions on the board, and Rob in particular will be involved as executive chairman in the strategic decisions we make. I think that will be very valuable relative to preserving the continuity of the business.
SND: Constellation has become a force across all major drinks categories, and is now active in cannabis as well. What business advantages is the company deriving from that total beverage alcohol approach?
Newlands: Today’s younger consumer drinks across wine, spirits, and beer much more so than their predecessors did. People used to suggest drinking one category and not mixing them. But that no longer holds. Now it’s more about occasion-based consumption, with some consumers opting to start the evening with a beer, have a glass of wine with dinner, and finish with a glass of Tequila, for example. So it’s a much different approach from the past, and we’ve aligned ourselves to match the consumer behavior in the market today.
SND: What do you see as Constellation’s biggest growth opportunities for the future?
Newlands: In wine and spirits, the premiumization trend is critical. In wine, our entire focus is on the $11-and-up segment, where the significant growth is. All of our recent acquisitions and innovations are centered on premiumizing and upweighting our portfolio at the higher end of the price ladder. In beer, our core franchises of Corona and Modelo are extremely strong, but we’ve also launched new offerings like Corona Premier and Familiar, and our Corona Refresca product will go national next year. In that space, innovation will be key as we look to extend our existing franchises or innovate to address consumer needs that we’re not currently touching. Then you have the recent investment in cannabis. While it’s early days—with Canada’s recreational market going live just yesterday—we consider that as a potential once-in-a century change in consumer behavior. We see it as a tremendous upside opportunity, and an offensive play for us.
SND: You’ve made a slew of acquisitions in wine and spirits in recent years. Which are paying off the most?
Newlands: In spirits, the High West acquisition has been superb. High West has created a unique position in whiskey, and it’s going extraordinarily well. We’re doing the best we can to meet demand. On the wine side, Meiomi is now almost quadruple the size of when we bought it. We’ve been able to lead and capitalize on the growth of the Pinot Noir category. Another would be Schrader. It’s one of the absolute premier Napa Valley Cabernets, and it gives us a crown jewel at the top of our wine business. The Prisoner Wine Co. is also contributing, and we just opened a new tasting room for that brand on Highway 29 in Napa. I would guess we’ll be getting six figures annually in terms of visitors. With the effort that we’ve put into it, if it doesn’t turn out to be one of the prime destinations in the Napa Valley, we’ll be very surprised.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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