CONSTELLATION LOOKING TO SPREAD ITS WINGS
At Constellation Brands Annual Investor meeting today, chairman and ceo Richard Sands made it apparent that Constellation is looking to expand its operations in Europe, and is interested in partnering with local distributors.
He said that the company plans to bring its Australian, South African and American wines to 14 countries in Europe, including Denmark, Sweden, Germany, Ireland, the Netherlands, and Switzerland and also looking at France, Poland, Norway, Finland, Belgium, Austria, Russia and the Czech Republic.
Spreading its wings as a global company is a major part of Constellation’s growth strategy.
“To succeed in today’s alcohol beverage industry one needs the distribution scale to ensure these products are available at the right places to consumers around the world,” said Richard Sands. “The combination of the distribution scale and portfolio breadth gives Constellation a competitive edge.”
Constellation’s recent acquisitions have certainly helped improve product mix as well as contributing more premium products. Richard stated that “acquisitions that will enhance value are key to strategy.”
When asked about future plans for consolidation, Richard said this:
“We have the financial capacity to make additional acquisitions and we believe because of our decentralized structure we have the management capacity to make additional acquisitions, so we’re not concerned in any way about our capacity,” he said. “But is the acquisition going to be strategic? Is the price going to be reasonable and will it create shareholder value?”
Premium products, particularly in the spirits segments, are another huge focus for Constellation, accounting for a large portion of sales. “We are focused on gaining in the premium and mid-premium sector,” said Richard, especially since retailers are “devoting more space to premium products.”
The key growth segments in spirits are tequila (9%), rum (6%) and vodka (4%). Although much of the focus is being shift to the premium category, the value segment makes up 42% of Constellation’s spirits products, while premium is at 34%, high end 18% and super 6% the value segment
He also pointed out that “wine is very powerful in terms of growth” and announced plans to enhance the premium wine portfolio, particularly fine wines.
When asked about direct to consumer wine sales, Rob Sands replied, “The direct to consumer market is pretty small. We will participate in the direct to consumer market to some degree but the issue isn’t really alienating retailers, but since it’s such a small channel, it hasn’t been much of a focus for us. If it becomes a larger channel than we will take a closer look.”
“Direct to consumer is more lucrative for smaller companies, but for us it’s not critically important. Because we’re large and important to our wholesale customers, we’re able to achieve most of our goals through the distribution channel. As we’re said before, we are big supporters of the distribution channel.”
Constellation has “increased national accounts across the board, wine spirits and beer,” continued Rob.
Stay tuned for more tomorrow.
He said that the company plans to bring its Australian, South African and American wines to 14 countries in Europe, including Denmark, Sweden, Germany, Ireland, the Netherlands, and Switzerland and also looking at France, Poland, Norway, Finland, Belgium, Austria, Russia and the Czech Republic.
Spreading its wings as a global company is a major part of Constellation’s growth strategy.
“To succeed in today’s alcohol beverage industry one needs the distribution scale to ensure these products are available at the right places to consumers around the world,” said Richard Sands. “The combination of the distribution scale and portfolio breadth gives Constellation a competitive edge.”
Constellation’s recent acquisitions have certainly helped improve product mix as well as contributing more premium products. Richard stated that “acquisitions that will enhance value are key to strategy.”
When asked about future plans for consolidation, Richard said this:
“We have the financial capacity to make additional acquisitions and we believe because of our decentralized structure we have the management capacity to make additional acquisitions, so we’re not concerned in any way about our capacity,” he said. “But is the acquisition going to be strategic? Is the price going to be reasonable and will it create shareholder value?”
Premium products, particularly in the spirits segments, are another huge focus for Constellation, accounting for a large portion of sales. “We are focused on gaining in the premium and mid-premium sector,” said Richard, especially since retailers are “devoting more space to premium products.”
The key growth segments in spirits are tequila (9%), rum (6%) and vodka (4%). Although much of the focus is being shift to the premium category, the value segment makes up 42% of Constellation’s spirits products, while premium is at 34%, high end 18% and super 6% the value segment
He also pointed out that “wine is very powerful in terms of growth” and announced plans to enhance the premium wine portfolio, particularly fine wines.
When asked about direct to consumer wine sales, Rob Sands replied, “The direct to consumer market is pretty small. We will participate in the direct to consumer market to some degree but the issue isn’t really alienating retailers, but since it’s such a small channel, it hasn’t been much of a focus for us. If it becomes a larger channel than we will take a closer look.”
“Direct to consumer is more lucrative for smaller companies, but for us it’s not critically important. Because we’re large and important to our wholesale customers, we’re able to achieve most of our goals through the distribution channel. As we’re said before, we are big supporters of the distribution channel.”
Constellation has “increased national accounts across the board, wine spirits and beer,” continued Rob.
Stay tuned for more tomorrow.
posted at 1:52 PM
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