Constellation Brands – the distributor of the Corona beer brand in the US – has reported stronger than expected full-year sales growth, though the company has cancelled its full-year guidance due to the unpredictable impact of the Covid-19 pandemic.
The company’s beer portfolio also includes brands such as Modelo Especial, Negra Modelo and Pacífico, and an 8% rise in beer sales saw the company report revenue of $8.34 billion for the year ended 29 February 2020, 3% higher than last year’s $8.11 billion figure.
Constellation’s beer segment accounted for 67% of the company’s total net sales over the year, registering net sales of $5.61 billion and operating income of $2.24 billion over the full-year. The Modelo Especial brand registered depletion growth of 16% over the full year, while the Corona Premier brand also registered double-digit growth.
However, the company’s full-year operating income did fall 10.6% to $2.15 billion from $2.41 billion in the company’s previous full-year results. This was due in part to falling net sales in the company’s Wine and Spirits division.
Constellation’s Wine and Spirits unit includes brands such as Svedka Vodka, Casa Noble Tequila and High West Whiskey, as well as wine brands such as Robert Mondavi, Kim Crawford and Wild Horse Winery. Full-year net sales registered by the division fell 6% year-on-year to $2.72 billion, with wine sales dropping 7% and spirits sales falling 6%.
Despite this, Constellation claimed its Wine and Spirits unit “outperformed the overall US wine and spirit category for the year”, thanks to its premiumisation strategy.
Bill Newlands, president and CEO of Constellation Brands, said: “Fiscal 20 represented another excellent year of strong results marked by milestones which include the achievements of record cash flow results and double-digit operating income growth for our iconic beer business.
“In addition, our Wine & Spirits Power Brands and new product introductions fuelled growth as our premiumisation strategy for this business continues to gain momentum.”
Looking forward, the ongoing Covid-19 situation has led the company to cancel its full-year business targets “due to potential impacts on the business from Covid-19”.
Grupo Modelo – the brewer of Corona, Modelo and Victoria beers – temporarily ceased production of beer last week due to the coronavirus situation, as the Mexican government deemed the brewers’ business activities ‘non-essential’.
© FoodBev Media Ltd 2020