Wine Division Loses out at Constellation Brands

The US conglomerate Constellation Brands has published its figures for the past fiscal year 2023 (March 1, 2022 to February 28, 2023). In the wine and spirits segment, both volume and sales declined compared to the previous year.

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Constellation Brands sees wine sales decline (Logo: Constellation Brands)
Constellation Brands sees wine sales decline (Logo: Constellation Brands)

Total category volume decreased to approximately 243.9 million litres (prior year: 269.1 million litres), a decrease of approximately 9.4%. Sales declined by 4% from approximately USD 2.096 billion (EUR 1.896 billion) to approximately USD 2.013 billion (EUR 1.821 billion), as did operating profit from approximately USD 476.9 million (EUR 431.3 million)  to about USD 415.2 mill. (EUR 415.2 million).

The decline in category sales was driven by the Wine division, where sales fell -5% from around USD 1.85 billion (EUR 1.67 billion) to around USD 1.75 billion (EUR 1.58 billion). Spirits, on the other hand, grew about 6%, from about USD 0.25 billion (EUR 0.23 billion) to about USD 0.57 billion (EUR 0.24 billion).

Challenging times

In an interview with Yahoo Finance, CEO Bill Newlands explained that the "mainstream segment" had been hit hard due to "a lot of challenges". However, he said that it used to represent 60% of the business, but has now fallen to 40%.

Growth was achieved in the fine wine and craft spirits segment, known as the "Aspira portfolio", the company said, including the well-known "Kim Crawford" and "Meiomi" brands. The company also said that its operating margin increased to 22.8% due to its favorable portfolio mix and successful cost reduction measures.

The company's total capital decreased from approximately USD 26.2 billion (EUR 23.7 billion) to approximately USD 24.9 billion (EUR 22.6 billion), while total sales across all categories increased from approximately USD 9.62 billion (EUR 8.7 billion) to approximately USD 10.28 billion (EUR 9.3 billion). The increase in total value sales was driven primarily by the beer category (+11%), which accounted for the largest share of sales at approximately USD 7.56 billion (EUR 6.84 billion). For the current fiscal year 2024, the company forecasts further growth in beer and stable figures for wine and spirits. RED

 

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