Constellation Brands reports modest growth

Constellation Brands, the world's largest wine group reported modest sales growth in its annual and fourth quarter 2022 financial results. Over the year and in the fourth quarter sales grew by 2% and 8% respectively.

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Constellation Brands Logo (Constellation Brands, Inc)
Constellation Brands Logo (Constellation Brands, Inc)

Significantly larger increases in sales were recorded by the wine and spirits segment, where revenues increased by 19% over the year, but by 'only' 7% in the last quarter. This could be explained with the sale of part of the Wine & Spirits business, as well as of the Nobilo Wine brand to Gallo, and the sale of the Paul Masson Grande Amber Brandy brand to Sazerac (both in January 2021), as these revenues fall into the final quarter of 2021.

Within the category, spirits outperformed wines (spirits +25%, wine +18%). The increase in wine sales was mainly due to the strong performance of what Constellation terms its 'fine wine' section, highlighted by the two flagship wines Meiomi Cabernet Sauvignon (California, USA) and Kim Crawford Illuminate Sauvignon Blanc (New Zealand).

In the past year, the company placed a special focus on the higher-priced segments, which was also reflected in an increased marketing spend. In conjunction with increased costs in many areas, this led to a lower return on sales. As CEO Bill Newlands said, "Despite various headwinds, we extended our leadership position in the high-end of the U.S. beer market, our high-end wine and spirits brands continue to outpace the industry complimented by successful innovation." He announced further investments in future growth to maintain the strong market position, especially in the US market.

Alongside its financial results, Constellation reported its engagement to the advancement of women

 

 

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