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Constellation Brands sees spirits sales drop
High West Whiskey owner Constellation Brands’ wine and spirits sales fell by 4% in fiscal 2023, with a double-digit decline in the fourth quarter.
US firm Constellation Brands saw its wine and spirits division fall to US$1.98 billion for the year ending 28 February 2023, with a 2% drop in organic net sales. In the previous financial year, Constellation’s wine and spirits sales rose by 9%.
For the fourth quarter, wine and spirits sales declined by 14% (down by 9% organically) to US$462.2 million.
The company’s total sales for fiscal 2023 increased by 7% to US$9.45bn, driven by an 11% increase for the company’s beer business.
Constellation’s Aspira portfolio of fine wine and craft spirits brands recorded double-digit growth for the full year. High West Whiskey, the company’s largest craft spirits brand, recorded low double-digit growth.
For the three months to 28 February, the company said its premium wine, fine wine and craft spirits portfolios all recorded growth, with strong increases for its Mi Campo, and Casa Noble Tequila brands.
Bill Newlands, president and CEO, said: “Our wine and spirits business won in its key areas of focus, outperforming the higher-end wine and spirits segments.”
The company’s direct-to-consumer (DTC) channels rose by 29% in fiscal 2023 and international net sales grew by 1% (up by 4% organically).
DTC sales in the fourth quarter rose by more than a third (35%), while international sales declined by 2% (up by % organically).
For fiscal 2024, the company expects wine and spirits sales to range between minus-0.5% and plus-0.5%, and operating income to grow by between 2% to 4%.
Constellation Brands initially invested in Canadian cannabis firm Canopy Growth in 2017, and has since invested billions of dollars in the company.
However, the business has struggled in recent years. Canopy Growth recorded a US$1bn impairment for the second quarter of fiscal 2023.
In February, the company revealed plans to align its Canadian cannabis operations after ‘continued unfavourable market trends’.
Canopy has estimated a pre-tax loss of approximately CA$425m to CA$525m for the fourth quarter of fiscal 2023.