News Alert: Constellation Wine & Spirits Chief Robert Hanson Steps Down
January 4, 2024Constellation is set to see new leadership at the head of its wine and spirits division, as current chief Robert Hanson will step down at the end of February. Constellation Brands president and CEO Bill Newlands will take over as head of the wine and spirits division on an interim basis as the company searches for a permanent successor.
Hanson has led Constellation’s wine and spirits unit since 2019, overseeing a dramatic transformation of the business that has seen it streamline and premiumize its portfolio. “Robert has been instrumental in leading the charge to reposition our wine and spirits business to a higher-end portfolio of brands more aligned with consumer trends, with an expanded focus to include global, omni-channel distribution, with more robust and targeted international and direct-to-consumer sales channels,” Newlands said in a statement.
Even after selling off millions of cases of lower-end brands to Gallo and The Wine Group in the past few years, Constellation remains the third-largest wine marketer in the U.S. in volume terms, with annual depletions of approximately 23 million cases, according to Impact Databank. Among the key moves during Hanson’s tenure, Constellation formed a new 40-state alignment with Southern Glazer’s, with the distributor handling about 70% of its wine and spirits business.
The company recently noted that its wine and spirits stable “underwent significant transformation over the last several years,” doubling its number of fine wine and craft spirits brands since fiscal year 2019. In its fiscal 2019, Constellation derived 58% of sales from brands below $15 a bottle. In its most recent fiscal year that equation reversed, with above-$15 bottles taking a 63% share. And by fiscal 2028, the company is targeting a share in the mid-70s for above-$15 brands. Looking ahead, the company believes it’s now well-positioned with premium and above labels like Casa Noble, Meiomi, The Prisoner Wine Company, High West, and My Favorite Neighbor, with the potential for more higher-end “tuck-in” acquisitions in the future.
In the six months through August, Constellation’s wine and spirits business saw organic net sales fell 11% to $444 million on shipments down 15% to 6.1 million cases, with operating income declining 19% to $81 million. Constellation is now targeting 1% to 3% net sales growth and 25%-26% operating margins for its wine and spirits business over the medium term, underpinned by its move toward the higher end of the market, although expectations for the current fiscal year are for sales down 1% to 2%.
“With the strategic, operational and capability transformation of the company’s Wine & Spirits business in place, this is the right time for me to transition leadership and to step down from my role with the company and pursue my future career goals,” Hanson stated. —Daniel Marsteller
| Constellation—Leading Brands in the U.S. | |||||
| Brand | Origin/Type | Total U.S. 2022 Depletions1 |
Volume Growth 2023 YTD2 |
||
|---|---|---|---|---|---|
| Table Wine | |||||
| Woodbridge by Robert Mondavi | California | 7,986 | -12.8% | ||
| Robert Mondavi Private Selection | California | 2,001 | -9.2% | ||
| Kim Crawford | New Zealand | 1,829 | 1.3% | ||
| Meiomi | California | 1,827 | -4.4% | ||
| Sparkling Wine | |||||
| Cook’s | California | 1,993 | 0.6% | ||
| Ruffino Prosecco | Italy | 529 | -7.6% | ||
| Spirits | |||||
| Svedka | Vodka | 3,830 | -1.5% | ||
| High West | American Whiskey | 170 | 1.6% | ||
| 1 Thousands of 9-liter cases. 2 Year-to-date ending 12/3/23 in IRI/Circana channels for wine and year-to-date ending November 2023 in control states for spirits. Source: IRI/Circana, NABCA, and IMPACT DATABANK © 2024 |
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Tagged : Constellation Brands
