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Constellation’s Sales Rise 7% To $4 Billion In Fiscal First Half

October 5, 2017

Constellation Brands’ net sales rose 7% to $4 billion in the company’s fiscal first half ended in August, as operating income grew by 10% to $1.3 billion. While Constellation’s fast-growing beer business has been making headlines, its portfolio of wine and spirits focus brands—including Black Box, Robert Mondavi Private Selection, Meiomi, Kim Crawford, Woodbridge by Robert Mondavi and Svedka—combined for a 12% depletions gain in the second quarter. That performance helped lead the drinks giant’s wine and spirits division to a 2% organic net sales increase, to $1.4 billion, for its fiscal first half.

A number of Constellation’s recently acquired wine and spirits brands have been making strong contributions, the company says. The Prisoner, acquired from Huneeus Vintners last year for $285 million, grew depletions by 30% during Constellation’s second quarter, while Charles Smith—purchased for $120 million last October—surged by 74%. On the spirits side, Utah’s High West—for which Constellation paid about $160 million last fall—saw depletions rise by 37% in the three months through August.

Constellation says recent wine brand introductions Cooper and Thief and 7 Moons are also gaining traction. Cooper and Thief ($25) is a Bourbon barrel-aged red blend positioned in the super-premium segment, while 7 Moons is a Central Coast and Lodi-sourced red blend retailing at around $13.

Meanwhile, Constellation’s beer portfolio—led by the Modelo brand family—continues to soar, with sales up 10% to $2.6 billion for the first half. The Modelo portfolio posted a nearly 20% rise in depletions in the company’s second quarter.

In addition to ongoing growth for its Mexican import lineup, Constellation bolstered its craft beer range in August with the acquisition of Florida’s Funky Buddha for an undisclosed sum. Funky Buddha, which has annual capacity of 45,000 barrels, is known for its strong taproom sales and markets brands including Floridian Hefeweizen and Hop Gun IPA. The new acquisition joins Ballast Point in Constellation’s craft portfolio. —Daniel Marsteller

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