just On Call - Constellation Brands targets draught with Corona Light launch
Constellation released its YTD results yesterday
The head of Constellation Brands has predicted that Corona Light will spearhead a draught beer sales surge as it rolls out on tap across the US this year.
In a conference call earlier yesterday (8 January), Constellation chief executive & president Rob Sands said that the beer brand, which is currently being distributed to on-trade accounts, should overtake Pacifico as its biggest draught beer. Draught sales make up 2% to 3% of Constellation's total beer business, but Sands said that with, the Corona launch, “there's no reason to think that draught can't get to (industry average) 10% of our business over time”.
According to year-to-date results, released yesterday, Constellation's draught beer sales grew by 30% last year, helped by the company's takeover in June of Crown Imports, the US JV that it previously operated with Grupo Modelo.
“We're very happy with our draught business,” Sand said. “As we get into new accounts with draught, we do see some evidence that helps our case sales as well. It's a very good marketing point to have those tap handles in front of the consumers as they are enjoying our products on-premise.”
Constellation’s expanded beer business was the main driver for strong sales and profits increases in yesterday's results, while wine and spirits stayed relatively flat. The company predicts flat growth for wine and spirits this year, however in yesterday's call Sands said the outlook for the next financial year is better.
Asked what factors made him optimistic, Sands said: “(The wines and spirits) business continues to grow nicely, number one. And, we don't see the need for increasing promotional activity and input costs, which were significantly higher this year.”
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