Beverage World - May 2008 - (Page 28) [COVERSTORY] » CONSTELLATION is the No. 1 wine company in the UK and Australia and No. 2 in New Zealand. Its Australian wineries include Adelaide Hills (right) and New Zealand’s Kim Crawford. mium wines, anchored by brands such as Clos du Bois, Blackstone and Ravenswood. Icon Estates is the fine wine division and Centerra Wine Co. is the specialty, fighting varietal and value brands division. “The reorganization eliminated some overlap and has enabled us to be more specialized in each of our sales forces in terms of the sales and marketing expertise that we have,” notes Sands. “For instance, the Icon division is focused very heavily on on-premise and white tablecloth, while not focused as much on the more mass merchandise channels, and the Centerra portfolio tends to be somewhat different channels and it takes different skills to sell that portfolio.” Dallas-based Glazer’s Family of Companies has benefited from its long-standing partnership with Constellation, reporting robust growth with the company’s wine brands it markets. “We applaud the strategic direction Constellation has taken with their new divisions,” remarks Louis Zweig, Glazer’s senior vice president, corporate strategy and business intelligence. “We will be working with Constellation to create the most efficient route to market for their brands that will maximize our collective businesses.” A Crowning Achievement Constellation’s import beer business generated US$2.4 billion in net sales last year, despite the fact that it was a transition year for Crown Imports, the 50-50 joint venture with Mexican brewer Grupo Modelo. Prior to the joint venture, Constellation-owned Barton Beers handled the Modelo portfolio across 25 US Western states, while The Gambrinus Companies handled the Eastern markets. Crown Imports now has a commanding 35-percent share of the US import market. “We spent a lot of time last year developing a sales and marketing organization that would cover the entire US, not just the West where we primarily had it. We’ve hired a lot of people and that organization is up and running and I think it’s running pretty smoothly at this stage,” says Sands. Along with strategically aligning Modelo’s importation business into one single organization, the joint venture allows Crown Imports to implement a consistent and focused marketing effort for the import portfolio, which includes Corona Extra, Corona Light, Negra Modelo, Modelo Especial and Pacifico brands from Modelo, as well as No. 1 Chinese import brand Tsingtao and Germany’s St. Pauli Girl. “We’ve been able to take advantage of the synergies that have been involved in being able to unify the West and the East, things like being able to buy national advertising and being able to call on chains that cut across states with one central organization,” Sands remarks. “I think it’s been a pretty successful first year.” Distributor partners now have access to national advertising as well as new packaging and product innovations on a wineries, such as Simi Winery, Franciscan Vineyards, Turner Road Vintners, Corus Brands and Ravenswood, Constellation has strengthened its high-end wine portfolio. With its scale and resources, Constellation has been able to improve production and sales functions at smaller wineries while preserving brand identities and leaving winemaking operations intact. After the acquisition of BRL Hardy in 2003, Constellation became the world’s largest producer and marketer of wines and this was followed by the purchase of the renowned wine company The Robert Mondavi Corp. in 2004, Canada’s Vincor International in 2006 and Beam Wine Estates last year. —H.L. Strategic Growth A significant part of Constellation Brands’ successful business model is the ability to take advantage of opportunities in the marketplace and diversify its spirits and wine portfolio through strategic acquisitions. With each acquisition, Constellation has been able to either increase its geographic reach or expand into new categories, such as the addition of Bisceglia Wine Co. in 1974, which provided access to a large varietal wine market in the western United States. With the acquisition of Widmer Wine Cellars and Manischewitz Wine in 1987, Constellation gained a popular table wine brand on the East Coast and a best- selling kosher wine brand. The 1990s marked a time of aggressive expansion activities, including the purchase of Barton, Inc. in 1993, which gave Constellation entrance into the lucrative spirits market, followed by the acquisitions of Vintners International Co., the Almaden Vineyards and the Inglenook Vineyards. The 1995 purchase of United Distillers Glenmore gave Constellation a significant presence in the cordial and liqueur category, while the addition of UKbased Matthew Clark plc, a leading producer of British wines, in 1998 marked the company’s continued international expansion. Through its acquisition of estate 28_BEVERAGE WORLD_MAY 2008 BEVERAGEWORLD.COM http://BEVERAGEWORLD.COM
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