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Constellation’s Sales Rise 3% For Fiscal Year, As Meiomi, Mexican Beers Drive Gains

March 29, 2018

Constellation Brands saw rapid growth across its Mexican beer portfolio and premiumization in wine and spirits yield solid gains in its fiscal year ended in February. The drinks giant’s net sales were up 3% on a comparable basis to $7.6 billion for the year, while operating income rose 13% to $2.5 billion.

Constellation’s wine and spirits portfolio saw depletions rise by 0.9% for the fiscal year, while shipments slipped 1.2% to 58.6 million cases. On an organic basis, excluding the company’s divestiture of its Canadian wine business, the wine and spirits unit’s net sales were up 5% to $2.88 billion, while operating income advanced by 7% to $800 million.

Upscale brands like Meiomi and The Prisoner propelled growth in Constellation’s fourth quarter, with net sales up 24% and 18% respectively. Black Box and Italian import Ruffino were also on the rise, increasing by 16% and 10% respectively. According to Impact Databank, Meiomi was up 25% to 1.35 million cases in the U.S. in calendar 2017, while The Prisoner’s flagship red blend advanced by 18% to 165,000 cases. Black Box, meanwhile, surged by 18% to 6.35 million cases last year, and Ruffino saw a dynamic performance from its Prosecco offering, which jumped 19% to 440,000 cases and has more than doubled in size over the past three years.

Constellation also noted that newer offerings like wine brands Cooper and Thief and 7 Moons as well as vodka extension Svedka Blue Raspberry have been performing well. 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.

On the beer side, depletions grew 10% and shipments rose 9% to 268 million cases. Net sales were up 10% to $4.7 billion and operating income surged 20% to $1.8 billion. The Modelo family of brands continued to drive growth, crossing 110 million cases, along with ongoing gains for Pacifico. Meanwhile, the Corona brand recently launched a new Premier light lager extension billed as a low-calorie brew that will appeal to men over 35. Premier, which will look to challenge Anheuser-Busch InBev’s successful Michelob Ultra offering, will have a marketing presence at U.S. Open of Golf and the British Open as well as other golf events. —Daniel Marsteller

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