Drinks group Constellation Brands has outlined its ambition to develop a 'higher-end wine and spirits portfolio with distinctive brands and products', following the divestment of a number of wine brands.
The firm, which owns Robert Mondavi Winery, Casa Noble Tequila and other brands, announced the divestment of Cooper & Thief, Crafters Union, The Dreaming Tree, Monkey Bay, 7 Moons, and Charles Smith Wines to The Wine Group.
This follows on from the divestment of a number of wine and spirits brands in 2021, enabling the business to compete 'predominantly in premium and fine wine and craft spirits segments', it said, while also investing in its mainstream wine and spirits assets.
'Relentless Focus' On Consumer
“A key driver of our success has been our relentless focus on consumer preferences, including long-term consumer-led premiumisation trends, and remaining agile in our approach to stay ahead of evolving marketplace dynamics,” said Robert Hanson, EVP & President, wine and spirits division.
The most recent divestment to The Wine Group will enable the business to "focus and shift our portfolio towards the higher end, positioning ourselves to continue delivering industry-leading growth and shareholder value with the right portfolio for our ambitions", he added.
"In turn, The Wine Group is acquiring great brands that complement its current strategy of continuing to build a premium wine portfolio.”
Constellation announced its plans as it reported what it described as a 'strong' performance in the second quarter of its financial year, with net sales rising 12% to $2.65 billion (€2.73 billion), and operating profit growing 10% to $813 million (€836.2 million).
Its beer business achieved double-digit net sales and operating income growth in the period, it said, boosted by its Modelo Especial and Corona Extra brands, while its Wine & Spirits business was boosted by US shipment volume growth and the performance of its fine wine and craft spirits portfolio in international markets.
"We continue to make good progress against our operating and financial plans," said Garth Haninkson, chief financial officer. "The solid top-line performance of our Beer and Wine and Spirits Businesses in the first half has given us confidence to increase their net sales outlook for the full-year. We are on-track to exceed our goal to return $5 billion to shareholders by fiscal year-end."
© 2022 European Supermarket Magazine – your source for the latest Drinks news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.