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Flavoured spirits boost Constellation FY sales
By Amy HopkinsConstellation Brands has reported a 9% net sales lift in 2015/16, with the group’s spirits portfolio generating “solid growth” due to demand for flavoured brand extensions.
Svedka Vodka-maker Constellation Brands has reported “solid growth” among its spirits brands in 2015/16In the 12 months to February 2016, the US drinks group’s reported net sales reached US$6.5 billion, while reported operating income grew 18% to US$1.7bn.
Constellation achieved “stellar growth” across its beer portfolio and “further strengthened the financial profile” of its wine and spirits business by “channeling resources and brand-building investments toward higher-growth, higher-margin brands”.
In particular, flavoured brand extensions for Paul Masson Grande Amber Brandy and Svedka Vodka boosted spirits results. Constellation’s wine and spirits portfolio increased operating income by 8% in 2015/16 following the acquisition of the Meiomi wine brand.
“It has proved to be another dynamic year of significant accomplishments and impressive financial results for Constellation,” said Rob Sands, president and chief executive officer, Constellation Brands.
“In our wine and spirits business, we further strengthened the financial profile by channeling resources and brand-building investments toward higher-growth, higher-margin brands.
“This strategy, combined with the Meiomi wine acquisition, helped to drive healthy margin expansion and earnings growth. Overall, we are excited to build on the success of fiscal 2016, as we are targeting impressive results for the coming year.
Sands added that Casa Noble Tequila gained market share in the last financial year and is now one of the fastest-growing Tequila brands in the US.
Looking to fiscal 2017, Constellation expects net sales growth for wine and spirits in the mid single-digit range and operating income growth to be in the mid to high single-digit range. The group also expects its $285 million acquisition of The Prisoner Wine Company brands, announced today, to boost results.
As part of a bid to boost its spirits and cocktail portfolio, Constellation acquired minority stakes in the recently reopened Nelson’s Green Brier Distillery and RTD brand Crafthouse Cocktails through its new Constellation Ventures investment arm last year.