Sector News

Constellation to sell about 30 brands to Gallo in $1.7bn deal

April 4, 2019
Food & Drink

Constellation Brands will sell about 30 of its wine and spirits brands and six US winemaking facilities to E & J Gallo Winery for $1.7 billion.

The move sees the Corona maker offload wines principally priced at $11 or less in retail stores, as it looks to focus on its premium beverage portfolio.

Brands included in the transaction include Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan, and Ravenswood.

Meanwhile, included wineries are Mission Bell, Turner Road Vintners, Clos du Bois and Wild Horse in California, Hogue Cellars in Washington, and Canandaigua in New York.

Bill Newlands, Constellation Brands CEO, said: “One of the hallmarks of our success over the years has been our ability to evolve and stay on the forefront of emerging consumer trends. This decision will help enhance organisational focus on a more premium set of wine and spirits brands that better position our company to drive accelerated growth and shareholder value.

“In turn, Gallo is acquiring a collection of great brands that complement their operational model and business strategy to provide quality products to consumers at every price point.”

Joseph Gallo, chief executive officer of Gallo, added: “We are committed to remaining a family-owned company focused on growing the wine industry. While we continue to invest in our premium and luxury businesses, we see a tremendous opportunity with this acquisition to bring new consumers into the wine category. We will continue to provide our customers and consumers with quality products at every price point.”

In its most recent quarterly results, Constellation recorded a 9.5% rise in net sales, as its Corona and Modelo brands continued to drive growth. However, sales growth in the company’s wine and spirits segment was stagnant, up 0.4%

The firm predicted that for fiscal 2019 it expects net sales and operating income in its wine and spirits unit to decline low-single digits.

Following the divestiture, Constellation said its remaining wine and spirits portfolio represents a collection of “powerhouse brands”, including Svedka Vodka, Casa Noble Tequila, High West Whiskey, Mount Veeder Winery and The Prisoner Wine Company.

In February, it acquired a minority stake in US craft alcohol firm Black Button Distilling, in a move to fill white space in its spirits portfolio.

By Jules Scully

Source: FoodBev

comments closed

Related News

September 12, 2021

Roquette opens a plant protein center of expertise in Vic-sur-Aisne, France

Food & Drink

The new center of expertise illustrates Roquette’s strategy of making its Vic-sur-Aisne site a dedicated place for plant protein development. This center will be a major asset to design the future technological processes that will bring new plant protein properties.

September 12, 2021

Cargill opens $150m pectin processing plant in Brazil

Food & Drink

The new state-of-the-art facility will prioritise “sustainable production with advanced CO2 emission reductions and biomass reuse,” a company statement said. It will also enable Cargill to meet increasing demand for clean label texturising ingredients.

September 12, 2021

Azelis IPO to raise US$1B on Belgian stock market

Food & Drink

The move will assist in repaying outstanding debt (circa €1.6 billion or US$1.9 billion), while providing the company with increased financial flexibility. The IPO is also expected to support Azelis’ growth strategy and future acquisitions by providing funding and giving it access to capital markets.

Send this to a friend