Exclusive news and research on the wine, spirits and beer business

News Briefs for October 7, 2015

October 7, 2015

•Constellation Brands achieved solid sales growth in its second quarter, propelled by a double-digit increase for its beer business. The Victor, New York-based Constellation saw sales rise by 8% to $1.733 billion for the three-month period ended August 31, as the company’s beer business—led by the Corona franchise and Modelo Especial—enjoyed 14% net sales growth on a 10% depletions increase. Constellation’s spirits and wine business was also on the rise, with net sales growth of 3%. The company said its spirits unit, led by Svedka, achieved across-the-board growth, while its Kim Crawford, Black Box, The Dreaming Tree and Ruffino wine brands all delivered double-digit sales gains.

•Crown Royal has become the first spirits brand to include macro-nutritional labeling on its packaging. Brand owner Diageo has begun shipping cases of the Canadian whisky with packaging that includes details on serving size, alcohol by volume, calories and carbohydrates, protein and fat per serving, as well as the U.S. Dietary Guidelines definition of a standard drink: 0.6 fluid ounces of alcohol. Prior to a recent ruling by the TTB, beverage alcohol producers were mostly prohibited from listing such facts their labels. The practice is now allowed on a voluntary basis. Diageo says it will “continue to add this important information to its labeling and packaging as brands change or update their labels.”

•Ste. Michelle Wine Estates is introducing three new single-vineyard wines under its Seven Falls Cellars label. Retailing at $40 a bottle, the new entries include a GPS White Blend, Jones Vineyard; GPS Cabernet Sauvignon, Stone Tree Vineyard; and GPS Zinfandel, Jones Vineyard. The new Seven Falls offerings will be in limited on-premise distribution and also will be sold on the brand’s e-commerce site.

•Diageo and Heineken have completed a deal in which the drinks giants will swap certain global brewing interests. Under the accord, Diageo has sold its 58% stake in Desnoes & Geddes (producer of Red Stripe) to Heineken, which now owns a 73% stake in the company. Diageo has also sold Heineken a nearly 50% stake in GAPL Pte Limited (which holds 51% of Guinness Anchor Berhad in Malaysia and is the licensee for Guinness and ABC Stout in Singapore), giving Heineken full ownership. Finally, Diageo has acquired Heineken’s 20% stake in Guinness Ghana Breweries, increasing Diageo’s shareholding to 72%. Diageo is being paid a net cash consideration of $780.5 million under the agreement, which it will use to reduce borrowings.


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