crossorigin="anonymous"> Constellation Brands will sell Svedka vodka Sazerac as the wine and spirits segment struggles – Subrang Safar: Your Journey Through Colors, Fashion, and Lifestyle

Constellation Brands will sell Svedka vodka Sazerac as the wine and spirits segment struggles


Constellation Brands Inc. Svedka Vodka at a liquor store in the Upper East Side neighborhood of New York, U.S., on Friday, June 28, 2024.

Bang Guan | Bloomberg | Getty Images

Constellation Brands It will be announced on Tuesday Sell ​​your Svedka vodka brand to New Orleans-based spirits company Sazerac.

The transaction is expected to close in the coming months, Constellation said in a press release. He did not disclose the value of the deal.

“The steps we’ve taken over the past several years to reshape our wine and spirits portfolio will support our efforts to accelerate the performance of this business,” Constellation CEO Bill Newlands said in the release. are.” “This transaction is another step in our effort to ensure that our wine and spirits portfolio is optimized to succeed and meet our growth objectives.”

Constellation’s wine and spirits business is a drag on the company’s strong beer portfolio, which includes Modelo and Corona.

“We continue to face increasing assortments in our wine and spirits business, particularly in the lower price segments,” Newlands said on the company’s most recent earnings call in October.

In the second quarter, the company’s The company reported that wine and spirits shipments fell 9.8 percent year over year. The segment’s net sales and operating income declined by 12% and 13%, respectively.

So far this year, wine and spirits account for just 5% of Constellation’s volume, but 17% of net sales. Of this, the vast majority of new sales came from wine rather than spirits, with 86% and 14% share respectively.

Constellation acquired Swedka when it bought Spirits Mark One LLC in 2007 for $384 million.

Sazerac, a privately held company, will join Svedka in a portfolio that includes Buffalo Trace bourbon, Fireball Cinnamon Whiskey, Southern Comfort and many other global brands.

Constellation will continue to own its spirits portfolio, which includes High West Whiskey, Mi Campo Tequila and Casa Noble Tequila.

Although shares of Nakshatra fell slightly in early trade, investors and analysts seemed to welcome the news.

“While the existing wine division remains, the divestiture of SVEDKA is a clear positive for the segment’s future growth prospects,” said Bernstein analyst Nadine Sarut. “It also indicates that management is willing to take tough decisions to grow the business, which is another positive for corporate governance.”

Bernstein maintains an equivalent buy rating on the stock and a $325 price target on shares that currently trade around $237.

Bernstein called the news “a clear positive for Norsht,” saying the company’s weakness in wine and spirits has dragged down its beer business.

Additional details about the transaction will be provided at the Morgan Stanley Global Consumer and Retail Conference on Dec. 3, the company said.



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