Constellation to remove 40% of wine brands

Beverage giant Constellation Brands will sell or discontinue up to 40% of its wine and spirits portfolio to focus on its “power brands” that sell for more than $11.

Constellation owns a number of wine brands, including New Zealand label Nobilo

As reported by Passionate about wine, the company’s new strategy was presented this week at the Consumer Analyst Group of New York (CAGNY) conference. About 60% of Constellation’s wine and spirits portfolio is made up of “flagship brands” whose retail price exceeds $11 a bottle.

Constellation owns The Prisoner Wine Company. The Snitch is one of his “power brands” that sells for over $11

“So anything that’s not a ‘power brand’, you can assume we’re either going to sell it or discontinue it or milk it very quickly over the next year,” said David Klein, Chief Financial Officer of Constellation. Passionate about wine.

However, there is one sub-$11 wine brand that will be spared – Robert Mondavi’s Woodbridge, as it is Constellation’s best-selling wine brand.

The Mondavi brand sells well across the board. One of his biggest recent successes is his Bourbon cask-aged Chardonnay and Cabernet Sauvignon, which is now a million-case brand.

At the event, Constellation Chairman Bill Newlands, who will succeed Rob Sands as CEO on March 1, was keen to allay investor concerns.

“We are optimizing the wine and spirits business with single-digit growth rates and operating margins above 30%. We expect to generate at least $4.5 billion in returns through dividends and shareholder buyouts over the next three years,” he said.

Other wine brands currently in the Constellation portfolio are: Kim Crawford, The Prisoner Wine Company, Meiomi, Charles Smith Wines, Schrader, Clos du Bois and Ravenswood.

Its spirits brands include Casa Noble tequila, Svedka vodka, Paul Masson Grande Amber brandy and Black Velvet whiskey. db first reported the rumor that Constellation was planning to sell some of its wine brands last October.

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Jean H. Vannatta