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

Constellation’s Mexican Beer Production Ramps Back Up, But Fiscal Year Outlook Remains Uncertain

July 1, 2020

Constellation Brands saw its Mexican beer production climb back to normal levels in June after a reduction in output due to Covid-19, but the company says the outlook for its current fiscal year remains uncertain due to the highly volatile conditions brought on by the pandemic. For its fiscal first quarter ended in May, Constellation saw sales decline 6% to $1.96 billion on a comparable basis, with operating income down 1% to $691 million.

Sales were held back by a 6% decline in beer shipments during the quarter, as Constellation was forced to reduce production in Mexico due to pandemic-related restrictions. Beer depletions continued to rise at a rate of 5.6%, however, as strong off-premise gains offset a 75% reduction in the on-premise channel forced by the Covid-19 shutdown.

On the wine and spirits side, Constellation announced a key acquisition earlier this morning, purchasing direct-to-consumer wine brand Empathy Wines for an undisclosed sum. Robert Hanson, president of the wine and spirits unit, told SND the deal will significantly enhance Constellation’s e-commerce capabilities as it streamlines its wine portfolio to focus on higher-end brands such as Robert Mondavi, Schrader, The Prisoner, Simi, and To Kalon Vineyard Company.

Constellation’s wine and spirits business saw a 1.1% decline in depletions for the first quarter, although its “power brand” portfolio including labels like Kim Crawford, Meiomi, and others advanced by 5%. Newer offerings like The Prisoner Unshackled and Robert Mondavi Private Selection Buttery Chardonnay are off to a strong start, the company added.—Daniel Marsteller

Constellation Brands—Million-Case Wine & Spirits in the U.S., Pro Forma1 

(millions of 9-liter case depletions)

Rank Brand 2018 2019 Percent
Change2
1 Woodbridge by Robert Mondavi 9.69 9.58 -1.1%
2 Svedka 4.38 4.55 3.9%
3 Robert Mondavi Private Selection 2.13 2.22 4.2%
4 Cook’s 1.97 1.89 -4.1%
5 Ruffino3 1.42 1.42
6 Kim Crawford 1.33 1.37 3.0%
7 Meiomi 1.27 1.32 3.9%
Total Million-Case Brands 22.19 22.35 0.7%
1 Excludes brands sold to Heaven Hill, Sazerac and Gallo in 2019 and 2020.
2 Based on unrounded data.
3 Includes still wine and Prosecco.

Source: IMPACT DATABANK © 2020

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