Constellation Brands (CSE: CBA), a major player in the beverage alcohol industry, recently released its third-quarter results, painting a mixed picture for the company. Organic net sales declined by 2%, attributed largely to broader economic pressures and shifting consumer behavior. However, a closer examination reveals a more nuanced story, particularly within Constellation’s spirits business, where resilience and strategic shifts are starting to yield results.
Overall Sales Decline Reflects Broader Challenges
The 2% organic net sales decline impacted both the beer and wine segments. The company acknowledged challenging operating environments – including inflation and a softening economy – as key contributors. The figures, reported by Impact Databank, underscore the continued volatility impacting the entire beverage alcohol market.
Spirits Segment Demonstrates Strength
While the overall picture was down, Constellation’s spirits business proved to be a key area of growth. Modelo, Corona, and Pacifico continued to gain market share, driven by sustained consumer demand for these established brands. Notably, the success of new offerings like Corona Sunbrew and Corona Familiar contributed significantly to this momentum. The company’s strategic investment in non-alcoholic beverages, exemplified by the upcoming launch of Modelo Chelada Limón y Sal (projected to expand by 50% over the next 24 months), highlights a commitment to diversifying its portfolio and appealing to a broader consumer base.
Wine Business Remains Flat
In contrast, Constellation’s wine business experienced flat shipments of 1.5 million cases, accompanied by a 7% decline in sales. Despite the continued performance of key brands like Kim Crawford, The Prisoner, and Harvey & Harriet in retail channels, the overall market dynamics continued to pose challenges.
Strategic Portfolio Adjustments
Over the past year, Constellation has undertaken several strategic portfolio adjustments, including the divestiture of Svedka vodka to Sazerac and several wine brands to The Wine Group. The company is also employing strategic pricing actions on select brands and refining distributor contracts to optimize performance and channel dynamics. These adjustments are aimed at sharpening focus and driving operational efficiency.
Outlook and Future Focus
Looking ahead, Constellation expects total organic net sales to decline in the range of 4%-6%, with comparable operating income down by 9%-11%. CEO Bill Newlands emphasized a focus on factors within the company’s control, highlighting brands like Kim Crawford, Ruffino, The Prisoner, and Unshackled as key drivers of future growth. The company remains committed to strategic investments and operational refinements to navigate the evolving market landscape.
Key Statistics:
* 11 months ending November 2025 in control states for spirits
* 52 weeks ending October 5, 2025 in IRI/Circana channels for wine
Source:
These results were reported by Impact Databank. To stay up-to-date on the latest news and trends in the beverage industry, subscribe to Shanken News Daily [here](https://www.shankennewsdaily.com/)
