On Thursday, Constellation Brands will announce the results from its fiscal-2021. The numbers, to the end of February, bring to an close a 12-month period that saw year-to-date sales rise by 3.4% to US$6.66bn.
Here’s a look at the news that is likely to have shaped Constellation’s performance in its Q4 reporting period.
- December saw Constellation’s cannabis partner, Canopy Growth, dial down its production footprint. Coinciding with the planned closure of five facilities in Canada as part of a cost-cutting programme, Canopy also confirmed to just-drinks that its VP of beverage & edibles, Andrew Rapsey, had returned to his former employer after less than a year in post
- Just after the festive break, the company finally offloaded a raft of its sub-US$11 wine and spirits brands to E&J Gallo – almost two years after the transaction’s original announcement. The sale, valued at US$810m, also included several production sites in the US. Also moving across was the New Zealand wine brand Nobilo, albeit in a separate transaction, for $130m
- Following the release of Q3 and year-to-date results, CEO Bill Newlands teased analysts in the subsequent conference with scant details of Constellation’s next hard seltzer move. Hinting at “another exciting new … initiative” in the category, Newlands acknowledged hard seltzer’s solid foundations as a beverage category in its own right. “We believe these product launches will help further strengthen our competitive position in the fast-growing hard seltzer category, broaden our distribution reach and enhance our market share in the high-end of the US beer market,” he said
- News of a legal row involving Constellation and Anheuser-Busch InBev broke in mid-February. A lawsuit from A-B InBev alleged that Constellation was overstepping the terms of the two companies’ Corona US licensing agreement, in using the brand name for a hard seltzer. Countering the claim, Constellation accused the brewing giant, which owns Corona in all markets outside the US, of trying to stifle competition – A-B InBev has also been highly active in hard seltzer. “[This is a] blatant attempt to restrain a strong and well-established competitor in a high growth segment of the US beer market, and completely misaligned with general industry and legal standards,” Constellation said
- Rounding off the company’s final quarter was the appointment of group CMO Jim Sabia as MD of beer operations. The newly-created position sees Sabia take the lead on brewing operations and commercial business functions. Constellation is still on the hunt for a new CMO
This week’s announcement of full-year figures follows a fiscal-2020 when sales were up 3% on the year prior. Considering the year-to-date performance for the group, will Constellation be one of the only drinks brand owners to have enjoyed a better calendar-2020 than the year before?