The New York-based company owns more than 100 brands, including Robert Mondavi, Kim Crawford, Ruffino, Meiomi, Simi Winery, and The Prisoner.
It is one of the largest wine suppliers in the United States, but that part of the business has struggled in recent years.
Wine sales fell by 14% year-on-year in the three months ended November 2024, according to the company’s latest update. Spirits sales were also down by 15%.
Constellation Brands is now planning to throw in the towel and get out of the wine industry, according to Wine Business.
The company’s Central Valley wine operations would be sold to Delicato Family Wines, whose brands include Francis Coppola, 1924 and Stoneleigh.
Meanwhile, the firm’s coastal brands and vineyards would go to The Duckhorn Portfolio, which was swallowed up by private equity firm Butterfly Equity last October.
Constellation Brands was established in New York’s Finger Lakes region back in 1945. It was renowned for selling Richard’s Wild Irish Rose, a fortified wine, but it eventually became a major wine producer after making several key acquisitions.
However, the company’s big break came in 2013. AB InBev, the world’s largest brewer, had just agreed to purchase Mexico’s Grupo Modelo for $20.1bn.
That deal fell foul of the US Department of Justice’s antitrust agency, which said it would dent competition in the US market. AB InBev was forced to sell Grupo Modelo’s US operations to get the deal over the line.
Constellation stepped in to buy Modelo’s US business, including the Piedras Negras brewery and the Crown Imports distribution arm.
That made Constellation a major player in the US beer market. Modelo and Corona have gone from strength to strength in the ensuing years, and Modelo is now the country’s most popular beer brand.
However, the wine and spirits business has weighed on the company. In September, Constellation issued a profit warning after revealing it expected an impairment of up to $2.5bn on its wine and spirits unit.
Total US wine sales fell by 6% in 2024, according to SipSource data. Shifting demographics, economic forces and health concerns were blamed. Constellation has now reportedly decided that enough is enough, and could exit the wine trade completely.
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