US beverage giant Constellation Brands is repositioning its wine and spirits business. The portfolio will be exclusively focused on higher-growth and higher-margin brands that align with consumer-driven premiumization trends. To this end, an agreement has been signed with The Wine Group (TWG) for the acquisition of six of its wine brands: 'Woodbridge', 'Meiomi', 'Robert Mondavi Private Selection', 'Cook's', 'SIMI', and 'J. Rogét Sparkling', along with related inventories, facilities, and vineyards. The company announced this in a press release on April 9th. In a communiqué released simultaneously by The Wine Group, it was stated that the agreement includes TWG's acquisition of three wineries and approximately 6,600 ha/16,300 ac of owned and leased vineyards throughout California. The wineries include production facilities in Lodi and Monterey County, as well as the Simi winery in Healdsburg.
The remaining wine portfolio at Constellation Brands, according to the company, now comprises brands predominantly offered at price points of around €16 and up, operating in growing segments and distribution channels. These include well-known Napa Valley brands such as 'Robert Mondavi Winery', 'Schrader', and 'The Prisoner Wine Company'; the 'My Favorite Neighbor' wine brand family from Paso Robles; 'Kim Crawford' from New Zealand; the Tuscan producer 'Ruffino Estates' and 'Ruffino Prosecco'; 'Sea Smoke' from Santa Barbara; and 'Lingua Franca' from Oregon's Willamette Valley. As a result, the Robert Mondavi brands – 'Woodbridge', 'Robert Mondavi Private Selection', and 'Robert Mondavi Winery' – now belong to different owners.
Shifting consumer preferences
“This transaction reflects our multi-year strategy to reconfigure our business, resulting in a portfolio of higher-end wine and craft spirits brands that are aligned to evolving consumer preferences and help bolster our competitive position,” said Bill Newlands, President and CEO of Constellation Brands. Furthermore, the company is undertaking a review of its organizational structure to optimize performance and accelerate growth. This review, according to Constellation, is expected to yield annual cost savings of more than $200m by fiscal year 2028. The company anticipates that the majority of this work will be completed within fiscal year 2026.
Premium and ultra-premium brands
In its statement, TWG indicated that the focus of the agreement is on growth and the diversification of its portfolio. Besides acquiring popular premium and ultra-premium brands, the purchase would bring additional local volume, an expanded retail presence, new internal operational capabilities, and much more. “We’re thrilled to enter into an agreement with Constellation to acquire these highly regarded brands and assets,”stated John Sutton, CEO of The Wine Group. The addition of these assets will build on our commitment to being a consumer-led company, delivering a diversified portfolio that offers consumers exceptional taste, quality, and value - for any occasion.” SG
