just the Preview - Constellation Brands Q2 & H1
Constellation Brands releases its Q2 & H1 results later this week
Constellation Brands will report its second-quarter and half-year results on Thursday (3 October). Here just-drinks takes a look at the group's highs and lows in the three months to the end of August.
- The quarter started with Constellation closing the drawn out process to take full control of Grupo Modelo's US beer business. The move from US joint-venture partner with Modelo to exclusive brewer, distributor and sales and marketer for Modelo's brands in the country was initially mooted in June last year. Clearance was finally granted when Modelo acquiror Anheuser-Busch InBev agreed to grant Constellation perpetual rights to Modelo's brands in the US as well as ownership of the Mexican brewer's Piedras Negras brewery. The deal has made Constellation the third largest brewer in the US.
- Also in June, Constellation's chief marketing officer, Chris Fehrnstrom, was confirmed as the next chairman of the Wine Institute, the trade body for California's wine producers.
- In early-July, the company targeted a South Korean launch for its Svedka vodka brand. Constellations selected Lotte Chilsung Liquor to handle importation and distribution of Svedka in the country.
- In a conference call following the release of its first-quarter results, Constellation's CFO hailed the takeover of Modelo's portfolio in the US as a strong leverage point with US drinks retailers. The company “definitely has a bigger seat at the table” in conversations over shelf space and distribution points, said Bob Ryder.
- Last month, a survey of the US beer market showed that Constellation was finding success in the depressed premium light beer category through a broader roll-out of the Corona Light brand. "We believe Constellation’s strategy of rolling out Corona Light draught is a logical one, given the relative out-performance of draught versus bottle in on-premise thus far in 2013,” said Guestmetrics' CEO, Bill Pecoriello.
In the first quarter of Constellation's fiscal year:
- Comparable net profits in the three months to the end of May fell by 3% to US$74m
- Net sales rose by 6.1% to $673.4m
- Operating profits decreased by 5% to $104m
For a full round-up of just-drinks' coverage of Constellation's Q1 results, click here.
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