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Interview, Part 2: Robert Hanson, Constellation’s President Of Wine And Spirits

April 15, 2021

In the second part of our interview, Constellation’s president of wine and spirits Robert Hanson discusses innovation activity, the new 40-state alignment with Southern Glazer’s, and the company’s ongoing digital transformation.

SND: What can we expect from Constellation on the new product front looking ahead?

Hanson: We’re excited about Kim Crawford Illuminate, which is 7% abv and 70 calories a glass. It’s targeting young multicultural wine consumers, females in particular, who are looking for a full flavor profile but more sessionable products. Illuminate hasn’t cannibalized our core Kim Crawford varietals at all. It’s been an incremental purchase that’s recruiting new people to the category. We’re going to introduce a wine seltzer from Woodbridge this summer, which is 70 calories, has zero sugar, and is a more modern product offering from Woodbridge to recruit younger consumers. For Robert Mondavi Private Selection, we’re launching RMPS 100, a 100% Cabernet and 100% Chardonnay. We’ve had great success extending The Prisoner with Cabernet and Chardonnay varietals, and we’re introducing a Pinot Noir next month. We’ll also extend Unshackled—the No.-1 new introduction in the fine wine category over the past year—with a Sauvignon Blanc. In spirits, our Svedka vodka sodas are a runaway train right now, so we’ll have to catch supply up to demand. We’ve also launched ready-to-serve Manhattan and Old Fashioned cocktails with High West.

SND: Why was it the right play to consolidate with Southern Glazer’s in 40 states?

Hanson: We made the decision to shift 70% of our business to Southern because of the alignment to our strategy. Southern, under Wayne Chaplin’s leadership, has really been looking around the corner at the evolution of beverage alcohol. Southern has been making significant investments in digital commerce in their B2B platform, Southern Proof, and significant investments behind the shift in how the high end is going to be sold moving forward. They are building out a really strong capability in ready-to-drink and convenience, for example, where so much of the energy is going in the market. And obviously there are efficiencies that come with dealing with this buyer that’s running that magnitude of the business. It’s really the strategic opportunity that was most aligned to where we’re going to go.

SND: What benefits are you seeing across your business from the enhanced focus on digital?

Hanson: We think it’s going to be a winner takes most gain in beverage alcohol, as the consumer leverages technology to engage with brands. We’ve put a strong focus on building out the DTC and three-tier e-commerce businesses, but also in shifting our focus in brand-building to social and digital marketing. Our DTC business grew at twice the rate of the DTC market in our fiscal 2021, and our three-tier e-commerce business, which had been stood up for quite some time, has extended its leadership over the last 12 months. It beat the total market growth, which was very significant, by four points. We became the first CPG company, for example, to integrate products from Instacart into Facebook ads. We have real partnerships with not only the selling platforms like Instacart and Drizly and Amazon, but the media platforms like Facebook, and are leveraging the real-time data that allows us to continue to drive the acceleration of our business. Look for more of that, including forging partnerships with other pure-play retailers, as the market’s really being disrupted.

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