Constellation Sharpens Focus On Core Wine And Spirits BrandsOctober 9, 2019
With its pending $1.7 billion sale of 34 lower-end wine and spirits brands to E.&J. Gallo slated to close by the end of February, Constellation Brands has refocused its wine and spirits portfolio around a core of premium and above labels.
Constellation’s wine and spirits unit suffered in its recently completed second quarter owing to distributors transitioning ahead of the Gallo sale, as net sales dropped 9% to $704 million and operating income fell 20% to $160.4 million. Yesterday, Robert Hanson, president of the wine and spirits unit, spoke to investors on plans for the business moving forward.
“The reality is the consumer is in charge now,” Hanson said. “Increasingly, they want to put dollars against brands that match their lifestyle, and we’re focused on producing brands and narratives that do that and deliver.”
Specifically, Constellation says it will center its efforts on 10 key “power brands”: Kim Crawford, Meiomi, Woodbridge, Svedka, Ruffino, Robert Mondavi Winery, Robert Mondavi Private Selection, Simi, The Prisoner, and High West.
Among other moves, the company will look to leverage trends in the wine category like alternative packages and whiskey barrel-aged wines. Woodbridge, which recently introduced Tetra Paks, will be rolling out a Bourbon barrel-aged Cabernet and Red Blend and a rum barrel-aged Chardonnay ($8 a 750-ml.) in January. Meanwhile, Kim Crawford has extended its range with canned wines ($13 a 2-pack of 250-ml. cans), and Simi is introducing a Red Blend aged in rye whiskey barrels.
Elsewhere, Ruffino will debut an organic Prosecco in December, priced at a $2 premium to the core brand, and early next year The Prisoner Wine Co. will expand its lineup with Unshackled, an extension encompassing a Cabernet, Red Blend, and Rosé retailing at $22-$25. On the spirits side, Svedka will launch a trio of Pure Infusions flavors—Ginger Lime, Strawberry Guava, and Dragonfruit Melon ($12 a 750-ml.)—next March.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.