Constellation Brands Repositions Wine and Spirits Business to a Portfolio of Exclusively Higher-Growth, Higher-Margin Brands Aligned to Consumer-Led Premiumization Trends

Rhea-AI Summary

Constellation Brands (NYSE: STZ) has announced a strategic agreement with The Wine Group to divest its mainstream wine brands and facilities, focusing on premium offerings priced $15 and above. The transaction is expected to close after Q1 FY2026, pending regulatory approval.

The retained portfolio includes prestigious brands like Robert Mondavi Winery, Schrader, The Prisoner Wine Company, and Kim Crawford - the #1 Sauvignon Blanc in the U.S. The company will also keep its craft spirits portfolio including High West whiskey and Casa Noble tequila.

Brands being divested include Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét sparkling wine. The company is undertaking an organizational restructuring expected to deliver net annualized cost savings exceeding $200 million by FY2028, with most changes completed within FY2026.

Positive

• Strategic repositioning to focus on higher-margin, premium wines ($15+)
• Expected cost savings of over $200 million annually by FY2028
• Retention of Kim Crawford, the #1 Sauvignon Blanc brand in the U.S.
• Portfolio optimization aligns with premium consumer preferences

Negative

• Reduction in market share and revenue stream from mainstream wine segment
• Organizational restructuring may involve transition costs and disruption
• Loss of established mainstream brands like Woodbridge and Meiomi

Insights

Financial Analyst

Constellation Brands' decision to divest its mainstream wine portfolio represents a strategic realignment toward higher-margin premium segments. This transaction with The Wine Group sheds brands like Woodbridge and Meiomi while retaining those priced primarily above $15, including Robert Mondavi Winery and The Prisoner Wine Company.

The financial implications are substantial. The company projects $200+ million in annual cost savings by FY2028, suggesting significant operational efficiencies from this more focused approach. While divesting mainstream brands will reduce overall sales volume, the retained premium portfolio likely delivers substantially higher margins, potentially improving overall profitability metrics.

This repositioning follows a clear consumer premiumization trend across alcoholic beverages. By concentrating resources on upmarket wines and craft spirits, Constellation creates better strategic alignment with its already successful higher-end beer business, enabling more cohesive premium positioning across all beverage categories.

The organizational restructuring mentions implies significant workforce adjustments accompanying this portfolio transformation. This comprehensive approach—simultaneously streamlining the product mix, operational footprint, and organizational structure—reflects a decisive shift toward a more focused, premium-oriented business model that sacrifices scale for potentially improved returns on invested capital.

Beverage Industry Expert

Constellation's divestiture marks a definitive pivot in industry strategy, moving away from the volume-centric "stack it high, sell it cheap" approach toward what beverage insiders call the "premiumization ladder." This strategic evolution removes lower-margin brands that were likely facing increasing pressure from private label competitors and boxing-in their premium positioning.

The retained portfolio now consists exclusively of brands with strong provenance stories and craft credentials—exactly what today's premium beverage consumer seeks. Notably, the company maintains Kim Crawford (the #1 Sauvignon Blanc in the US) while divesting Meiomi and Woodbridge, suggesting a careful valuation of brand equity versus volume metrics.

The transaction also streamlines Constellation's production footprint by transferring physical assets including vineyards and production facilities. This reduces capital intensity and fixed-cost burden while preserving the high-value intellectual property central to premium positioning.

What's particularly telling is the inclusion of craft spirits in this strategic refocus. High West whiskey and premium tequilas complement the wine portfolio by targeting similar premium consumption occasions and retail channels. This creates operational synergies in sales, marketing, and distribution despite the different product categories.

The $200+ million in projected annual savings signals this isn't merely portfolio pruning but a fundamental redefinition of how Constellation approaches the wine and spirits business—focusing resources where they can generate superior returns rather than chasing volume across all price tiers.

• Signs agreement with The Wine Group to divest₁ primarily mainstream wine brands and related facilities from its wine and spirits portfolio
• Retained portfolio for Constellation includes a collection of award-winning, iconic brands, predominantly priced $15 and above and in growing segments and channels

ROCHESTER, N.Y., April 09, 2025 (GLOBE NEWSWIRE) -- Constellation Brands, Inc. (NYSE: STZ), a leading beverage alcohol company, announced today that it has signed an agreement with The Wine Group to divest primarily mainstream wine brands and related vineyards and facilities from its wine portfolio. The transaction is subject to the satisfaction of certain closing conditions, including the receipt of regulatory approval, and is expected to close immediately following the end of Constellation’s first quarter of its fiscal year 2026.

Constellation’s retained wine portfolio will consist of a collection of highly regarded wines from top regions around the world, predominantly priced $15 and above. This includes iconic Napa Valley brands Robert Mondavi Winery, Schrader, Double Diamond, To Kalon Vineyard Company, Mount Veeder Winery, and The Prisoner Wine Company; the My Favorite Neighbor family of wine brands from Paso Robles; Kim Crawford from New Zealand—producer of the #1 Sauvignon Blanc in the U.S.₂; acclaimed Tuscan producer Ruffino Estates and Ruffino Prosecco; sought-after gems like Sea Smoke from Santa Barbara’s Santa Rita Hills AVA, Lingua Franca from Oregon’s Willamette Valley, and more. This outstanding collection is complemented by Constellation’s award-winning craft spirits portfolio including High West whiskey, Nelson’s Green Brier whiskey, Mi CAMPO tequila, Casa Noble tequila, and others.

“This transaction reflects our multi-year strategy to reconfigure our business, resulting in a portfolio of higher-end wine and craft spirits brands that are aligned to evolving consumer preferences and help bolster our competitive position,” said Bill Newlands, President and CEO, Constellation Brands. “Concentrating our wine and spirits portfolio in higher-growth segments remains an important element of our overall business strategy and complements our higher-end beer portfolio, aiming to ensure we continue to participate in more consumer occasions across beer, wine, and spirits.”

Brands to be divested to The Wine Group include Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook’s, SIMI, and J. Rogét sparkling wine, along with associated inventory, facilities, and vineyards.

In preparing to manage a more focused wine and spirits business following the anticipated close of the transaction, and to help ensure the company’s enterprise-wide structure, resources, and investments are aligned to help optimize the performance of the business and drive accelerated growth, the company is undergoing a review of its organizational structuring. This review is anticipated to deliver net annualized cost savings in excess of $200 million by fiscal year 2028. The company expects the majority of this work to be completed within its fiscal year 2026.

Additional commentary and financial information related to the transaction will be included as part of Constellation Brands fiscal year and fourth quarter 2025 earnings release and financial tables, as well as other supporting materials, posted on Wednesday, April 9, 2025, after the close of the U.S. markets on the company’s investor relations website at ir.cbrands.com.

₁ We entered into a definitive agreement to fully divest and, in certain instances, exclusively license the trademarks of a portion of our wine and spirits business, primarily centered around our remaining mainstream wine brands and associated inventory, wineries, vineyards, offices, and facilities
₂ #1 in dollar sales, Circana, total U.S. Multi-Outlet + Convenience, 52 weeks ended March 23, 2025

ABOUT CONSTELLATION BRANDS
Constellation Brands (NYSE: STZ) is a leading international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy. Our mission is to build brands that people love because we believe elevating human connections is Worth Reaching For. It’s worth our dedication, hard work, and calculated risks to anticipate market trends and deliver more for our consumers, shareholders, employees, and industry. This dedication is what has driven us to become one of the fastest-growing, large CPG companies in the U.S. at retail, and it drives our pursuit to deliver what’s next.

Every day, people reach for our high-end, iconic imported beer brands such as those in the Corona brand family like the flagship Corona Extra, Modelo Especial and the flavorful lineup of Modelo Cheladas, Pacifico, and Victoria; our fine wine and craft spirits brands including The Prisoner Wine Company, Robert Mondavi Winery, Casa Noble Tequila, and High West Whiskey; and our premium wine brands such as Kim Crawford.

As an agriculture-based company, we strive to operate in a way that is sustainable and responsible. Our ESG strategy is embedded into our business and we focus on serving as good stewards of the environment, investing in our communities, and promoting responsible beverage alcohol consumption. We believe these aspirations in support of our longer-term business strategy allow us to contribute to a future that is truly Worth Reaching For.

To learn more, visit www.cbrands.com and follow us on X, Instagram, and LinkedIn.

FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements. The word “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements may relate to business strategy, future operations, prospects, plans, and objectives of management, including related to the repositioning of Constellation’s wine and spirits business, the anticipated closing of the transaction, the satisfaction of certain closing conditions including receipt of regulatory approval, the expected timetable for closing the transaction, Constellation’s efforts to align with evolving consumer preferences, bolster its competitive position, optimize performance, and drive accelerated growth, the outcome of the organizational structuring review, including the timing and amounts associated with anticipated net annualized cost savings, as well as information concerning expected actions of third parties. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements.

The forward-looking statements are based on management’s current expectations and should not be construed in any manner as a guarantee that any of the events anticipated by the forward-looking statements will in fact occur or will occur on the timetable contemplated hereby. All forward-looking statements speak only as of the date of this news release and Constellation does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

In addition to risks and uncertainties associated with ordinary business operations, the forward-looking statements contained in this news release are subject to other risks and uncertainties, including the completion of the transaction on the expected terms, conditions, and timetable, regulatory requirements, the outcome of the organizational structuring review, the actual amount of net annualized cost savings achieved, the accuracy of all projections, and other factors and uncertainties disclosed from time-to-time in Constellation Brands’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended February 29, 2024 and its Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2024, which could cause actual future performance to differ from current expectations.

MEDIA CONTACTS	INVESTOR RELATIONS CONTACTS
Amy Martin 585-678-7141 / amy.martin@cbrands.com Carissa Guzski 315-525-7362 / carissa.guzski@cbrands.com	Joseph Suarez 773-551-4397 / joseph.suarez@cbrands.com Snehal Shah 847-385-4940 / snehal.shah@cbrands.com David Paccapaniccia 585-282-7227 / david.paccapaniccia@cbrands.com

A downloadable PDF copy of this news release can be found here http://ml.globenewswire.com/Resource/Download/643f005d-7013-42f5-b4d3-b7547a3538da

FAQ

What brands will Constellation Brands (STZ) retain after the Wine Group divestiture?

STZ will retain premium brands priced $15+ including Robert Mondavi Winery, Schrader, Double Diamond, The Prisoner Wine Company, Kim Crawford, Ruffino, Sea Smoke, and craft spirits like High West whiskey and Casa Noble tequila.

How much cost savings does STZ expect from its organizational restructuring by 2028?

Constellation Brands expects to achieve net annualized cost savings exceeding $200 million by fiscal year 2028.

Which wine brands is STZ selling to The Wine Group in 2025?

STZ is divesting Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét sparkling wine brands, along with associated facilities and vineyards.

When will the STZ wine portfolio divestiture to The Wine Group close?

The transaction is expected to close immediately following the end of Constellation's first quarter of fiscal year 2026, subject to regulatory approval.