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just On Call - Beer coup boosts wines, spirits retail power - Constellation CFO

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Constellation Brands' takeover of Grupo Modelo's beer portfolio in the US gives it extra leverage with the country's retailers across all alcohol categories, the company's CFO has said.

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Bob Ryder told analysts yesterday (2 July) that Constellation “definitely has a bigger seat at the table” in conversations over shelf space and distribution points. Constellation became the third biggest brewer and beer seller operating in the US market after taking control of Modelo brands last month.

“Beverage alcohol is probably the most important category at retail, especially among chain and mass merchandise retailers, and as the third largest player overall that puts us in an important position,” Ryder said. “We have increased points of distribution in wines, spirits and beers so we think that we should be seeing continued favourable trends because of this.”

In first-quarter results released today, Crown Imports, the beer JV in the US with Grupo Modelo that Constellation has acquired, saw net sales increase by 5%.

CEO Rob Sands said in the call that sales were driven by brand “juggernaut” Modelo Especial, which sells more than 40m cases a year and “continues to grow in the 20% range”.

“The other thing that's happening is that the import category is doing better than the sub premium and premium categories," Sands added. "I think that our marketing also continues to resonate with the consumer and our equity continues to resonate.”

For a full round-up of just-drinks' coverage of Constellation's Q1 results, click here.


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