High West whiskey owner Constellation Brands will offload some of its mainstream wine brands after its wine and spirits sales fell by 7% for the fiscal 2025 year (FY).
The division’s FY sales totalled US$1.45 billion. In the final three months of the year (Q4), the segment grew by 5% to US$459.8 million.
The group’s whole portfolio grew by 2% in 2025, totalling US$10.21bn. In Q4, sales grew by 1% to US$2.16m.
The business has generally been buoyed by the success of its beer segment, which saw a 5% uplift in FY25. Beer sales in Q4 however were flat.
Despite the spirits and wine fall, the firm’s FY results were in line with expectations of a 5%-8% decline announced in its Q3 results. The firm had previously anticipated a 4%-6% decline.
The segment improved on its Q3 results, when sales fell by 14%, driven almost equally by spirits and wine.
Spirits fared worse than wine in both its Q4 and FY results. For the full-year, sales fell by 11% to US$218.8m, while Q4 sales slumped by 23% to US$49.8m. Wine fell by 7% in FY but grew by 10% in Q4.
Constellation Brands pointed to ‘US wholesale unfavourability’ for the segment’s decline, which it claimed was ‘partially offset’ by growth in international markets and the direct-to-consumer channel.
In Q4, it attributed growth to ‘contractual distributor payments, favourable product mix and volume growth across our US wholesale business, and higher volume growth from international markets, mainly driven by Canada’.
Divestiture and reviews
Constellations Brands has signed an agreement with The Wine Group to divest primarily mainstream wine brands and related vineyards and facilities. Offloaded brands include Woodbridge, Meiomi, Robert Mondavi Private Selection and more.
Subject to closing conditions, the transaction is expected to complete at the end of Q1 2026.
Its spirits portfolio, which includes Mi Campo Tequila, Casa Noble Tequila and Nelson’s Green Brier, remains intact. At the beginning of 2025, the firm sold Svedka Vodka to Sazerac.
Constellation Brands added that it is undergoing ‘a review of its organisational structuring’, which it anticipates will deliver net annualised cost savings in excess of US$200 million by fiscal year 2028. The review is expected to complete during fiscal 2026.
President and CEO Bill Newlands said: “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.
“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.”
DEI shake-up
Prior to releasing its full-year results, Newlands published a blog post setting out changes to the firm’s diversity, equity, and inclusion (DEI) policies.
He said: “We have long believed that cultivating a workforce that reflects the consumers and communities we serve and creating a workplace culture where all talent can come together and thrive are key elements to reaching our full potential.”
The changes include renaming the diversity and inclusion team to the inclusive culture team, to help “drive our company’s focus on building an inclusive culture that fully executes our business strategy, meets the needs of an evolving consumer base, positively contributes to our communities, and creates sustainable competitive advantage”.
The Supplier Diversity programme has also been renamed as the Supplier Inclusion programme.
However, the firm has retired its ‘Focus on Female Founders’ and ‘Focus on Minority Founders’ programmes. It said it will continue to seek out “early-stage ideas inclusive of these start-ups that are distinct, aligned with our business strategy and consumer trends, and that have the potential to create long-term value for our company”.
It added that its talent and resources will be focused on the priorities of the ongoing programmes, with activities outside of these goals paused. The firm specifically listed participation in external surveys as something it would leave behind, stating they “have proven to have much less of an impact in driving progress against our inclusive culture priorities”.
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Author: Lauren Bowes
