Constellation Brands' third quarter, ended November 30, was a pretty busy one; it completed several acquisitions as well as the sale of its Canadian wine business. During the quarter its wine and spirits business grew net sales by 5% to $289 million, while beer net sales grew a strong 16%.
CONSTELLATION BETS ON CATOCTIN. Wine and spirits largely took a backseat to beer during this morning's earnings call, but the big news is the announcement that its investment arm, Constellation Ventures, has made yet another minority investment before the close of the fiscal year. This time in Virginia's Catoctin Creek Distillery.
This latest investment follows the one in Bardstown Bourbon Co. providing Constellation with the "opportunity to further explore innovation in the brown spirits category," said chief Rob Sands in the company's earnings call.
Catoctin produces rye whiskey, gin and brandy. Its portfolio includes Roundstone Rye, Rabble Rouser, Mosby's Spirit, Watershed Gin, 1757 Virginia Brandy and fruit brandies. "In order to expand our production and portfolio, we needed the right partner for the next level of growth," said Catoctin president Becky Harris in a release of their own. "Constellation has a strong commitment to this category, and with their expertise and support, we look forward to bringing our Virginia whisky to the world with the same team and exceptional product quality."
FOCUS BRANDS. Constellations focus brands reported depletion growth of nearly 9% driven by the higher-margin brands like Meiomi and Prisoner wine brands. Rob also noted US depletion volumes (sales to retailers) outpaced shipment volumes (sales to wholesalers) for the quarter.
Rob is optimistic about the company's continued growth moving forward, predicting mid single-digit growth in net sales for its wine and spirits division.
IWSR REPORT: BUFFALO TRACE NO. 1 ON CRAFT COCKTAIL MENUS
Whiskey is the top dog in craft cocktail bars, holding down about 23% share of the average menu, according to the recent IWSR US On-Premise Insights: Cocktail Trends report. The report analyzes cocktail bars in 25 cities across the US. Keep reading to find out other popular categories, as well as the top brands.
WHAT'S ON THE MENU? It shouldn't come as a big shock that whiskey dominates craft cocktail bar menus as the category continues to experience healthy growth. But rum and gin aren't too far behind whiskey with about 16% and 15% menu share, respectively. We'll be interested to see if this translates to sales off-premise down the road.
Nearly 75% of on-premise operators say the brand name is an important factor when selling cocktails. Out of more than 6,000 brands listed on craft cocktail bar menus, Buffalo Trace is the No.1 bourbon brand, followed by Bulleit, Four Roses and Maker's Mark. For rum, Plantation 3 and Gosling's were most popular.
As for the specific cocktails, the Old Fashioned is the leading cocktail, with the most menu mentions in Los Angeles, Baltimore and Portland. Meanwhile, the Sazerac, Manhattan, Daiquiri, Dark n' Stormy and Negroni cocktails are also on an upward trend. You'll notice the margarita, the most popular mainstream cocktail, is nowhere to be found.
Zooming out, IWSR projects that spirits will be the only category to increase its on-premise share (by about 0.6%) over the next five years, while beer and wine give up about 1% share each.
SCREAMING EAGLE OWNER ACQUIRES FRENCH WINE ESTATE
US billionaire Stanley Kroenke, owner of Napa Valley's Screaming Eagle, has purchased a majority stake in Burgundy's acclaimed Bonneau du Martray estate from the Le Bault de La Moriniere family, reports Decanter.
The purchase price was not disclosed, but the agreement includes 11 hectares between the villages of Aloxe-Corton and Pernand-Vergelesses. The estate only produces grands crus of corton and corton-charlemagne. The Le Bault de La Moriniere family has owned the estate for nearly 200 years and decided to sell due to succession issues.
SUNTORY QUICKLY QUASHES BEAM IPO RUMOR
Earlier today a local Japanese publication reported that Beam Suntory's parent company Suntory Holdings was in talks to list its spirits subsidiary on the New York Stock Exchange. However, Suntory Holdings president Takeshi Niinami denied the report, per Reuters.
The original report claimed the company was in talks with overseas investment banks about listing Beam as a way to build up some cash to expand its footprint in emerging markets. "We are not considering any listing in the US," said Takeshi.
JACKSON FAMILY WINES' LA CREMA ANNOUNCES NEW HEAD WINEMAKER. Craig McAllister has been promoted from associate winemaker to head winemaker, which comes with an increased responsibility for the oversight of all winemaking operations, per a release. Craig joined La Crema in 2007 as harvest enologist. "Craig's long tenure with La Crema and passion for cool-climate winemaking make him a natural fit," says svp of production for JFW Mitch Davis, adding, "In particular, his expertise on the central Coast, in the Monterey appellation, a region in which we see tremendous potential for La Crema, coupled with his skill, experience and passion, will continue to enhance the strength of the La Crema winemaking team."
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