Constellation Rides Beer, New Acquisitions To Double-Digit Sales Gain

Constellation Brands enjoyed a strong first half of its fiscal year, following up on the 15% net sales growth it achieved in the first quarter with a 17% sales increase in the second quarter. Constellation also saw accelerated growth on the profit side, as its second-quarter operating income jumped by 27% after a 21% first-quarter bump.

For the second quarter (the three months ending August 31, 2016), Constellation garnered organic sales growth of 13%, while the acquisition benefits from craft brewer Ballast Point and the Meiomi and The Prisoner wine brands further boosted growth.

Beer remains the Victor, New York-based company’s growth engine, with second-quarter net sales rising by 20%. That includes 15% organic growth, as the company’s Grupo Modelo range (led by Corona Extra and Modelo Especial) continues to register double-digit volume gains, as well as the acquisition benefit from Ballast Point. Constellation purchased the fast-rising California craft brewer for $1 billion in late 2015.

Constellation achieved a 12% net sales increase in wine and spirits during the second quarter, including 8% organic growth and a solid contribution from Meiomi and The Prisoner, which Constellation acquired in the summer of 2015 and spring of 2016, respectively.

Constellation has been an aggressive acquirer over the past 18 months, adding nearly $2 billion worth of new additions. The company’s latest purchase occurred earlier today, when Constellation announced it had agreed to purchase Utah craft spirits producer High West Distillery. As SND reported last night, Constellation beat out rivals such as Moët Hennessy and Pernod Ricard for High West, which projects 70,000 cases in sales this year and expects to sell as much as 100,000 cases in 2017. While the price was undisclosed, sources close to the deal say Constellation paid roughly $160 million for High West.

News Briefs:

•Breakthru Beverage has agreed to acquire Toronto-based wine broker B&W Wines. B&W, which will integrate into Breakthru Beverage Canada, has a portfolio including wines from Australia, Italy, France, Spain and the U.S. Breakthru will absorb all of B&W’s staff, including founders Howard Wasserman, Jordan Bender and Jim Lisser.

•Anchor Distilling is launching Luxardo Bitter Bianco, billed as the first white Italian bitter in the U.S., in select markets this month. Produced from a distilled infusion of bitter herbs and aromatic plants such as rhubarb, thyme and bitter orange, Bitter Bianco is 30% abv and retails at about $27 a 750-ml.

•Scotch whisky producer The Lost Distillery Company has introduced three blended malts in the U.S. market. Joining the distiller’s Classic Selection range, the trio includes the new Benachie, Lossit, and Towiemore labels, all retailing at around $43 a 750-ml. They join existing Classic Selection whiskies Stratheden, Auchnagie, Jericho and Gerston. The Lost Distillery Company, whose offerings are handled in the U.S. by Miami-based Park Street, specializes in recreating historic whiskies from across Scotland’s Highland, Speyside, Lowland, Campbeltown and Islay regions.

•Sonoma’s Jordan Vineyard & Winery has partnered with France’s Champagne AR Lenoble for the limited release of Jordan Cuvée, a non-vintage brut Champagne. The bubbly is a blend of 30% grand cru Chardonnay from Chouilly, 35% premier cru Pinot Noir from Bisseuil and 35% Pinot Meunier from Damery. Jordan Cuvée is a limited release of AR Lenoble’s Brut Intense bottled exclusively for Jordan Winery. The limited release Jordan Cuvée ($45-$50) will be available in spring 2017 for direct-to-consumer purchase from the winery, with no immediate plans for a wider release.

Craft Brewing and Distilling News:

•Wyoming Whiskey is releasing Outryder, a new entry made of two separate mash bills. The first mash bill contains 48% winter rye, 40% corn and 12% malted barley, while the second mash bill contains 68% corn, 20% winter rye and 12% malted barley. The launch marks the distiller’s first use of rye in its whiskey. Outryder ($55) joins Small Batch Bourbon ($43), Single Barrel Bourbon ($60) and Barrel Strength Bourbon ($199) in the Wyoming Whiskey portfolio. The new release is launching across the U.S. in a batch of 2,640 cases.

•Sierra Nevada Brewing Co. is set to launch two new labels—Sidecar Orange Pale Ale and Tropical Torpedo IPA—in January. Featuring orange peel and citrus-heavy hops, Sidecar Orange Pale Ale (5.3% abv) will be offered in six- and 12-packs of 12-ounce bottles, as well as on draft. Tropical Torpedo IPA (6.7% abv) is made using a proprietary dry-hopping method and will initially be sold in six-packs of 12-ounce bottles, with draft to follow later in the first quarter. Sierra Nevada, based in Chico, California, is ranked as the third-largest craft brewer in the U.S. according to the Brewers Association.

•St. Louis-based Schlafly Beer is rolling out a limited-release cider sampler pack, Proper Cider, in collaboration with Devon, England-based Sandford Orchards. The four-pack of 500-ml. bottles features Dry-Hopped, Scrumpy (classic), Vintage Cask and Raspberry variants. The Proper Cider variety pack is available throughout Schlafly’s 14-market distribution network for about $17.99. Operating a pair of brewery-restaurants in the greater St. Louis area, Schlafly produces roughly 60,000 barrels annually.

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