Constellation Brands to sell off some of its wine brands?

Constellation Brands, the number three brewer in the US, may be looking to offload some of its wine brands for over USD 3 billion, according to industry rumour. While still speculation at this point, such a move would not be surprising, but radical nonetheless. Constellation’s origins are in wine. It was founded as a wine company after World War II. Today it is stock market-listed, yet it continues to be controlled by the Sands family.

Constellation’s review of its wine portfolio underlines the company’s gradual shift to beer and cannabis products that target younger consumers. From its humble beginnings, Constellation has grown to be worth more than USD 40 billion thanks to offering imported Mexican beers (Modelo) and a host of US craft beers.

Allegedly, Constellation is considering the sale of the Clos du Bois, Mark West, Arbor Mist, and Cook’s labels, among others. These brands generated 12-month profits (EBITDA) of more than USD 260 million, it was reported. It plans to keep the Robert Mondavi wines, which it bought in 2004.

No stranger to strategy swings, Constellation made a big investment in the Canadian cannabis producer Canopy Growth, which it announced over the summer of 2018. It was the first deal of its kind for a listed beer company.

On 17 October 2018, Constellation announced that Bill Newlands, 59, will assume the role of President and CEO, succeeding current CEO Rob Sands, 60, on 1 March 2019. Rob Sands, who became CEO in 2007, will assume the role of Executive Chair. His brother, Richard Sands, who is currently serving in the role of Executive Chair, will assume the role of Executive Vice Chair.

Mr Newlands will be the first non-Sands to run the company, which was founded in 1945 by Rob’s father, Marvin, then aged 21. Rob Sands’ elder brother Richard, 67, ran the company from 1993 to 2007.