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Bourbon-aged wine stable to hit million-case mark in 2019 - Constellation Brands

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Constellation Brands' Bourbon-aged wine portfolio is on course to sell a million cases in 2019 just three years after its launch, the company's incoming CEO has said.

Constellation launched Robert Mondavi Bourbon Barrel-Aged Cabernet Sauvignon in 2016

Constellation launched Robert Mondavi Bourbon Barrel-Aged Cabernet Sauvignon in 2016

The jump has helped turn Constellation's Robert Mondavi brand from "one of our single biggest drags" into one of the company's fastest drivers, Bill Newlands told analysts this week. Constellation launched Robert Mondavi Bourbon Barrel-Aged Cabernet Sauvignon in February 2016. It also has a Chardonnay variant.

Newlands' projection for the Bourbon-aged wines, which sell in Total Wines & More for about US$12 a bottle, comes as Constellation looks set to jettison lower-value wines and focus on brands above $11. Speaking at the annual CAGNY event in Florida yesterday, the CEO-elect said the company has an "expectation" it will rationalise lower-value brands. He added that this would take away 40% of the company's profitability in wine but that once completed would boost growth for the wine unit to mid-single digits and pump margins above 30%.

In nine-month results released in January, Constellation said it expects FY sales for its wines & spirits unit to drop by low-single digits.

Meanwhile, Newlands said he wants to expand Constellation's Modelo Especial beer beyond its Hispanic base.

"There is a tremendous opportunity to see [Modelo] grow in the general population - in draught, in different pack sizes," Newlands said. "Modelo is a horse, and that horse has a long way to run."

Newlands is set to take over the CEO position from Rob Sands this year.

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Sectors: Wine

Companies: Constellation Brands

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