Oct 4, 2019 Liquor legend Constellation drops 6% — but jumps into hard seltzer Read More Good beer, bad cannabis... Constellation Brands already owns your one fancy buddy's liquor cabinet: High West whiskey, Ballast Point craft beer, Robert Mondavi wines, and Corona. But shares fell 6% because of its other vice: the $4B investment it made in the world's biggest pot company (Canopy Growth) dropped $1.3B in value over the last quarter. Even huge companies make bad stock investments.
Here, try this instead... A Corona-branded spiked seltzer. The experienced drinkers over at Constellation noticed that 90-calorie, anti-carb, alcohol-infused sparkling water had made "an impact" on their beer sales last summer. They also think the spiked seltzer trend is "here to stay," so they're making their own:
4 flavors: Mango, cherry, blackberry lime, and Tropical lime-flavored Corona Hard Seltzer.
1 trend: US sales of spiked seltzer nearly tripled over the last year to $295M.The Takeaway:You don’t just jump into a new category — you strategize into it... Constellation is targeting a specific area of spiked seltzer: Upscale. The execs believe there are laws when you're drinking White Claw, and that spiked seltzers will expand from low-end (where they are now) to high-end. Constellation doesn't like to play bottom-shelf, so its positioning Corona Hard Seltzer as your indulgent beachside date, not a bachelorette party default. Jul 6, 2019 Canopy Growth fires its Co-CEO — and it’s got Corona fingerprints all over it Read More Good thing he's Canadian, or this holiday would be sad... Bruce Linton, co-CEO of the world's largest cannabis company, Canopy Growth, told the world Wednesday that he got fired. Correction: The Company said he “stepped down.” But he was fired. And it looks like liquor legend and Corona-owner Constellation Brands was behind the big move.
Modelo lager. High West whiskey. Robert Mondavi merlot... Now pot. Constellation has already got the bar covered, so in 2018 it expanded beyond alcohol by spending $4B to acquire 37% of Canopy. This was the strategic vision: CBD-infused drinks. Canopy brings the marijuana-know-how, Constellation brings the beverage creation/distribution expertise. Then strategies stopped aligning:
Linton: The co-CEO was busy forging A-list partnerships with Martha Stewart and Snoop.
Canopy: The cannabis company is focusing on medical marijuana, with plans in 30 countries since the legal situation is easier than recreational.
Constellation: The alcohol company wants CBD-infused and profit-making drinks ASAP — but under Linton's leadership of Canopy, that wasn't priority #1.The Takeaway:It's all about the Board... The CEO may be boss, but he or she has to answer to the Board of Directors. Canopy has 6 seats on its Board, and 3 are execs at Constellation while a 4th is on Constellation's board, too (the alcohol empire managed to get board control with its $4B investment). Only 2 of Canopy's board members are independent from Constellation. Last week, Constellation's CEO was "not pleased with Canopy’s recent reported year-end results,” and it seems he and his board buddies did something about it. Apr 5, 2019 Corona-owner Constellation switches from wine to beer Read More We're getting bold aromas and notes of oak... from the earnings report of Constellation Brands. The liquor legend's beer sales jumped 9%, but wine slipped 8%. Blame that on 3 key trends:
Americans are drinking less.
When they do drink, it's higher-end stuff.
And they want to try something lower-cal (but refreshing).
"Rosé all day" is over... "Expensive low-alcohol rosé occasionally" is the new thing. Constellation's adjusting to those shifting tastes in a big way with its wine portfolio — "Non-premium" is out and vintage Brunello is in:
Under-$11 labels: Gone. Constellation just sold off 30 of its cheapest brands for $1.7B (it was hoping to get twice that).
Over-$11 labels: They get all the attention. Constellation's promoting them through new partnerships with the PGA and a bunch of NFL teams.
The Takeaway:Constellation's making alcohol more like seltzer... Rising Modelo sales have Constellation focused on beer. Next is Corona Refresca, the Mexican brand's 1st non-beer (but beer-branded) option that comes this month. Look out for its Insta-worthy guava or coconut-lime flavor cans. Pairs well with those 3 trends above. ⬆️⬆️