Constellation Brands "in position to attack" all drinks category acquisitions - CEO
Constellation bought The Prisoner wine brand six months ago
Constellation Brands' CEO has said the company is ready to add even more brands to its growing portfolio, with a spirit-mix beer a potential first target.
Rob Sands, who yesterday announced Constellation's purchase of US whiskey producer High West Distillery, said the group is in a "position to attack anything" in M&A, across the wine, spirits and beer categories. He said the company will continue to seek out new acquisitions and fill gaps in the portfolio with brands that "make sense".
He continued: "Anything in beverage alcohol really fits that bill, because obviously, we have strong sales organisations across wine, beer and spirits and extremely strong distribution networks in all three. High growth and high margin are really the two things that are critical to us."
Asked if Constellation would consider buying a cider or spirit-mix beer (SMB), Sands said SMB is a "very good category in terms of its premium positioning, margins and growth".
"That's clearly a sub-category that we'll be looking at in terms of developing our portfolio for the future," he added.
Meanwhile, the CEO, who was speaking after the release of Constellation's solid H1 results, said there is a "real shift" in US wine-buying trends as growth moves above the previously-strong US$8-to-$12 price range.
"We're seeing a definitive shift up in that regard and now you're sort of seeing this $15-to-$25 segment really coming on strong, as well as segments above that," Sands said.
California's Meiomi wine brand, which retails at about $20 a bottle, joined Constellation's portfolio last year, followed by the $40 The Prisoner range six months ago. The super-premium brands have been praised by analysts as being a big potential growth engine for Constellation and last month Morgan Stanley raised its long-term wine sales growth forecast for the group from 3.5% to 4.25%.
Sands said the premiumisation trend looked set to continue, "certainly in the mid-term".
"I'd say that the outlook for the category continues to be extremely positive," he continued.
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