Constellation Brands reports sales slipped 6% to $1.96 billion thanks to Covid-19. Beer depletions remained strong, production in Mexico returned to normal levels in June, and wine and spirits brands continued to gain traction in the fiscal first quarter. Net income fell 27.5% to $177.9 million, or 94 cents a share.
Beer Business
The company’s beer business saw depletions grow 5.6% as strong performance off-premise more than offset the 75% reduction on-premise from Covid-19. The Corona Brand Family grew double-digits in IRI channels driven by the accelerated growth of Corona Extra, the successful launch of Corona Hard Seltzer, and the continued strength of Corona Premier and Corona Refresca.
With the successful launch of Corona Hard Seltzer, the brand has quickly become the #4 hard seltzer player, approaching 6% IRI market share in the U.S. hard seltzer category. Ongoing distribution gains have led to IRI ACV distribution of nearly 65 since product launch in early March.
Modelo Especial continues to see accelerating consumer takeaway trends in IRI channels and delivered 12% depletion growth during the quarter.
Impacts from the COVID-19 related slowdown of beer production in Mexico impacted shipment volumes and distributor inventory levels and will extend into the second quarter, the company said. Product inventories are expected to return to more normal levels during the third quarter fiscal 2021.
Wine & Spirits
Shipments fell 12.9% and net sales were off 7% (organic, down 4%). The Power Brands are winning in the higher-end and across the majority of price segments of the U.S. The wine category shows strong velocity, and distribution gains that are outpacing the market.
Power Brand depletion volume grew 5% driven by Kim Crawford, Meiomi, Svedka, The Prisoner Brand Family, and Woodbridge by Robert Mondavi.
Constellation announced acquisition of Empathy Wines and said it “reinforces and supports the company’s direct-to-consumer and 3-tier eCommerce strategy, as consumers continue to migrate to these channels.”