STREAMING NOW: Watch Now
CLOSINGS: View Closings

Corona-maker focuses on premium wines

Americans are over cheap wine.Constellation Brands is getting dragged down by inexpensive wine. But i...

Posted: Jan 9, 2019 8:43 PM
Updated: Jan 9, 2019 8:43 PM

Americans are over cheap wine.

Constellation Brands is getting dragged down by inexpensive wine. But it's hoping more premium products will help turn things around.

Companies

Constellation Brands Inc

Alcoholic beverages

Beverages

Business and industry sectors

Business, economy and trade

Consumer products

Kinds of foods and beverages

Wine

Food and drink

Beer

The company, which makes Corona and Modelo beers, reported Wednesday that wine and spirit sales slumped in the last quarter of 2018, and said that it expects the trend to continue throughout the year. The company slashed its yearly forecast because of the poor results, spooking investors.

Shares of the company plummeted around 12% before the market opened Wednesday. They were down about 10% in the afternoon.

"We're disappointed with the performance of our wine and spirits business as we're facing challenges with the low end of the portfolio," Constellation Brands (STZ) president and incoming CEO Bill Newlands told investors.

Constellation's premium wine lines, including Kim Crawford, Meiomi and Prisoner, which cost more than $11 per bottle for the most part, are performing well, Newlands said. New products like Meiomi Rosé and SVEDKA Blue Raspberry are "exceeding our expectations," he noted.

Premiumization has been working for Constellation. Corona Premier, Corona Familiar and Modelo Especial gained the most market share among high-end beers over Labor Day and Thanksgiving, the company said. Newlands said that Constellation's beer business was the "highlight" of the third quarter results, and that growth was driven by Corona and Modelo products.

"Corona Premier has virtually done twice what we expected it to do heading into this fiscal year," he said. "It's been a phenomenal success." Premier, which launched last year, was the first extension to Corona's main line in 29 years.

Constellation has not been afraid to sell underperforming brands and make bold bets. Over the last several years, Constellation has grown its high-end wine and spirits portfolio. It acquired Grupo Modelo's US beer business, including Corona and Modelo, in 2013.

The company is also branching out into other industries. Constellation made waves when it invested in in Canadian cannabis company Canopy Growth. Constellation took a small stake in the company in 2017, and increased its investment to $4 billion last year. Additional expenses from the deal contributed to the company's decision to decrease its outlook for the year.

Analysts are bullish on the company's cannabis prospects. Last year, Canada legalized recreational cannabis, paving the way for alcohol and CPG companies to potentially sell cannabis-infused products.

Huntsville
Clear
28° wxIcon
Hi: 43° Lo: 20°
Feels Like: 23°
Florence
Clear
27° wxIcon
Hi: 46° Lo: 23°
Feels Like: 27°
Fayetteville
Clear
25° wxIcon
Hi: 43° Lo: 20°
Feels Like: 18°
Decatur
Clear
28° wxIcon
Hi: 43° Lo: 20°
Feels Like: 22°
Scottsboro
Few Clouds
28° wxIcon
Hi: 43° Lo: 21°
Feels Like: 28°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Cases: 249524

Reported Deaths: 3578
CountyCasesDeaths
Jefferson33064500
Mobile19951362
Madison13596148
Tuscaloosa13246154
Montgomery12435236
Shelby1061677
Baldwin889098
Lee781466
Morgan686150
Etowah643966
Calhoun6430121
Marshall635355
Houston537738
DeKalb492236
Cullman451542
Limestone433345
St. Clair432555
Lauderdale422354
Elmore412964
Walker3710111
Talladega359354
Jackson329823
Colbert329642
Blount299740
Autauga278042
Franklin256434
Coffee248315
Dale236254
Chilton227438
Dallas226832
Russell22383
Covington220434
Escambia198931
Tallapoosa184391
Chambers177950
Pike159914
Clarke159819
Marion143636
Winston135123
Lawrence131636
Pickens125718
Geneva12438
Marengo123124
Bibb119617
Barbour117811
Butler117842
Randolph104921
Cherokee103424
Hale97831
Fayette92516
Washington92219
Clay92024
Henry8756
Lowndes80229
Monroe79011
Cleburne77814
Macon74522
Crenshaw72030
Bullock70219
Perry6906
Lamar6898
Conecuh68814
Wilcox64218
Sumter58622
Greene42818
Choctaw42713
Coosa3544
Out of AL00
Unassigned00

Tennessee Coronavirus Cases

Cases: 374493

Reported Deaths: 4602
CountyCasesDeaths
Shelby48561673
Davidson43546421
Knox19358150
Rutherford18248163
Hamilton17311153
Williamson1168080
Sumner10123137
Out of TN811056
Wilson777980
Montgomery691585
Sullivan6641101
Washington6272108
Maury610667
Putnam600982
Blount575261
Bradley546935
Madison5445111
Sevier512133
Unassigned488822
Robertson389553
Tipton375339
Hamblen360761
Gibson332065
Dyer325451
Greene324872
Anderson310729
Dickson300434
Coffee288642
Carter286057
Bedford285132
Lawrence276134
Obion271751
McMinn267955
Cumberland266536
Roane243929
Warren243120
Jefferson236533
Loudon234819
Fayette230239
Hardeman227837
Monroe223244
Weakley221737
Franklin217935
Lauderdale208023
Hawkins204034
Wayne194610
Trousdale191512
Henderson190134
Macon186028
White180818
Rhea180132
Hardin180025
Marshall179622
Carroll178534
Lincoln166217
Haywood165830
Cheatham165317
Cocke165330
Campbell160323
Henry159319
Overton156435
Giles150249
Smith147720
Johnson144923
McNairy142433
Fentress124420
Hickman121619
DeKalb120422
Bledsoe11895
Lake11786
Crockett117126
Marion112219
Scott11197
Grainger105017
Chester104221
Decatur96112
Unicoi90226
Claiborne8979
Benton84214
Grundy79214
Cannon7864
Lewis77714
Morgan7626
Humphreys7418
Union7375
Jackson69410
Polk69415
Stewart61015
Houston59220
Clay56018
Sequatchie5465
Meigs51013
Perry49221
Moore4043
Pickett39513
Van Buren3792
Hancock1833

Community Events