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Constellation Brands FY results by category - Focus

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Earlier today, Constellation Brands reported a near-26% leap in net profits for the year on an 8% rise in sales. Here, we take a closer look at the company's full-year performance by category.

Casa Noble Tequila is one of the fastest growing Tequila brands in the US, according to Constellation

Casa Noble Tequila is one of the fastest growing Tequila brands in the US, according to Constellation

Beer

Organic net sales for beer in fiscal 2016 increased 13%, primarily due to volumes growth and favourable pricing. Beer depletions grew 12%, driven by strong consumer demand, the company said. Operating profits were up 24%. 

Constellation CEO Rob Sands said results were driven by Modelo Especial and Corona Extra. "This performance reflects ongoing excellent commercial execution and best-in-class brand marketing initiatives," he added. 

Wine and Spirits

Fiscal 2016 wine and spirits organic net sales increased 3% on a constant currency basis. The company said the increase reflects volume growth and favourable mix. Net sales for the 12 months to the end of February benefited from the overlap of a planned US distributor inventory destocking during fiscal 2015, Constellation said.

The combined categories saw an 8% increase in operating profits. Increases were driven by the Meiomi acquisition, lower cost of product sold and organic volumes growth, partially offset by higher marketing spend.

Sands said the company is seeing the benefits of its 'focus brands' strategy, which centres around 15 products. He said key brands posted depletion growth of 5% for the year, driven by Kim Crawford, Meiomi, Ruffino, Black Box, SIMI, Clos du Bois, The Dreaming Tree and Woodbridge by Robert Mondavi. 

The company's spirits portfolio generated "solid growth" for the year driven by flavoured line extensions for Paul Masson Grande Amber Brandy and Svedka Vodka. 

"The Casa Noble Tequila brand is one of the fastest-growing Tequila brands in the US and gained market share for the year," said Sands.

Today, the company also announced plans to pay US$285m for a range of US luxury wines that includes Napa Valley red blend The Prisoner.


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