Bottles of Constellation Brands Inc. Kim Crawford Sauvignon Blanc are on display for sale ... at a BevMo Holdings LLC store in Walnut Creek, California, United States on Wednesday, Jan. 3, 2018. Constellation Brands Inc. is expected to release its results on Jan. 5. Photographer: David Paul Morris / Bloomberg © 2018 Bloomberg Finance LP
Constella STZ sale of its cheaper wine brands for E&J Gallo seems to be bearing fruit by promoting their strategy of “premiumisation” in the wine sector.
In a call to investors today, President and CEO Bill Newlands said: "Our portfolio of preserved wines and spirits, excluding ceded brands , delivered net sales growth of 5% for the year, driven by double-digit volume growth from Meiomi, Kim Crawford and the Prisoner family of brands. "
Newlands alsont admitted that these three “wine power brands” achieved double-digit growth in distribution. Part of this growth was due to the int production of line extensions, such as Meiomi Cabernet Sauvignon, Prisoner Unshackled and Kim Crawford Illuminate - a low alcohol, low calorie wine.
However, it was beer sales, in particular Modelo, that claimed most of the credit for driving Constellation's sales growth for their fiscal year, which runs from March 1, 2020 to February 29, 2021. Constellation 's beer business saw exhaustion growth of over 7%.
Plans to improve the wine valuation strategy
Analysis and responseto consumer trends is a key element of Constellation's wine strategy. They particularly focus on the needs of Generation Z and Hispanic populations. Some of the key trends they follow include convenience, ready-to-drink (RTD), and improvement.
Some of the new wine products they plan to launch to meet consumer needs are: Woodbridge Wine Seltzer, Prisoner Pinot Noir, Unhampered Sauvignon Blanc and Saldo Red Blend.
Expanding e-commerce and direct-to-consumer wine sales is also part of the plan. Constellation has been very successful with online sales via Instacart, Drizly and Amazon AMZN this year.
According to Newlands, “The growth of our DTC wine continues to exceed the market 2 times…. Our early investments in this space have given us a first-come advantage, and we will continue to invest in DTC and e-commerce initiatives as consumers change where and how to buy from. alcoholic beverages. "
Indeed, Kim Crawford Sauvignon Blanc and Meiomi Pinot Noir take first place in their respective categories on Drizly.
Constellation also intends to pursue further savings in their
It is also important toe focus on sustainability and giving back to communities. Constellation has donated $ 4 million in COVID-19 aid to help industry partners and communities. Newlands announced that it is also dedicated to helping on-site establishments return to successful open businesses.
Many of these efforts appear to be paying off, as the group's revenues for the year were $ 8.615 billion, up 3%. They also reported record operating cash flow of $ 2.8 billion and debt reduction of $ 1.7 billion.