Constellation shares dropped 10% after the company fell well short of predicted earnings for the three months to the end of November 2022, dragging down the shares of other American beer, wine and spirits producers as investors worry that alcohol beverage producers may have a hard time maintaining margins in 2023.
Constellation chief executive Bill Newlands attributed the unexpected low earnings to a “recent series of headwinds” including higher costs across the supply chain as well as poor weather and worsening economic conditions in California, according to an article in The Drinks Business. Other challenges facing Constellation and the drinks business in general are shortages and price rises for glass, aluminum cans, carbon dioxide and packaging costs such as pallets and cartons.
Although Constellation is deeply entrenched in wine and spirits, growth of their Mexican import brands Corona and Modelo, beer now makes up more than 70% of its business.
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