Constellation reported that quarterly beer shipments were down by 2% for the three months to the end of February. For the next 12 months the company predicts beer net sales growth of between 7% and 9%, indicating that the company is optimistic for the coming year.
Sales of wines and spirits dropped 9% below the same time last year. The company said they expect organic net sales in wines and spirits to range between minus 0.5% and plus 0.5%.
Despite the negative results in the most recent quarter, Constellation indicated that growth would come in their premium products. Even with persistent inflation, Constellation said consumers had stuck to its premium beer brands including Modelo Especial and Corona Extra while demand for its premium and fine wines had also remained robust – another sign that although consumers are experiencing higher costs at the cash register, they are still leaving room in the pocketbook premium products, potentially a good sign for the craft beer segment.
Constellation also said it would further leverage its direct-to-consumer (DTC) routes to market to attract higher-income customers for its wine brands. The company noted that premium brands tend to perform well on DTC channels which allows the company to increase margins on those brands. Constellation bought the eCommerce wine company Empathy Wines in 2020. Wine can be sold DTC in most states, but it is prohibited for beer in all but a few states.
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