Drinks giant Constellation Brands has reached an agreement with The Wine Group to divest a portion of its mainstream and premium wine portfolio, including Cooper & Thief, Crafters Union, The Dreaming Tree, Monkey Bay, 7 Moons, and Charles Smith Wines. Financial terms were not revealed.
The move builds on the company’s efforts to establish a “higher-end wine and spirits portfolio with distinctive brands and products, delivering exceptional consumer experiences”.
Constellation divested the majority of its mainstream wine and spirits portfolio in 2021 and is focused on competing predominantly in premium and fine wine and craft spirits segments, while continuing to invest in the growth of its remaining strategic mainstream wine and spirits assets.
“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.
“Over the past three years, we reshaped ourselves into a higher-end wine and spirits division with intentional, strategic mainstream plays and are moving our business towards becoming a leading global Premium/Fine Wine & Craft Spirits portfolio. This transaction will enable us 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. In turn, The Wine Group is acquiring great brands that complement its current strategy of continuing to build a premium wine portfolio.”
The move was announced alongside Constellation’s second-quarter results which showed net sales rising 12% to $2.66bn and operating profit up 10% to $813m.
Its beer business achieved double-digit net sales and operating income growth in the period, boosted by its Modelo Especial and Corona Extra brands. Meanwhile, 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.
