Constellation Brands signs major U.S. wine and spirits distribution deals
Constellation Brands Inc., the global wine and spirits conglomerate that owns many of the Bay Area’s best-known wineries and brands, said Thursday it has signed multi-year distribution agreements with four distributors: Southern Wine & Spirits of America Inc., Republic National Distributing Co., National Wine & Spirits and Johnson Brothers Liquor Co.
Terms of the new deals were not disclosed.
The new lineup results in new distribution appointments in 19 states affecting more than half of its portfolio of products, according to officials at Victor, N.Y.-based Constellation. Details on former distribution arrangements weren't immediately available.
Constellation said each distributor has exclusive rights to sell its U.S. portfolio of wines and spirits in specific states. For example:
• Southern Wine & Spirits will have exclusive distribution rights in nine state markets, including California, Arizona, Delaware, Florida, Hawaii, Illinois, Kentucky, New York and Pennsylvania.
• Republic National Distributing, commonly known as RNDC, is responsible for eight markets, including Colorado, Louisiana, Maryland, Nebraska, Oklahoma, South Carolina, Texas and Washington D.C.
• National Wine & Spirits will have exclusive distribution rights in Indiana, and Johnson Brothers in Iowa.
The realignment consolidates more than half of Constellation’s U.S. wine and spirits business with one distributor per state market, “creating a number of benefits for Constellation, its distributors and its customers,” the company said, by creating deeper, tighter relationships with distributors, along with improved coordination of marketing and promotional programs supporting its brands.
Constellation will continue to work with and support other distributors in its remaining U.S. markets, officials said July 23.
In late March, Constellation said it would sell its value spirits business to Sazerac Co. for $334 million and slash its workforce by 5 percent company wide, in response to “an increasingly challenging global economic environment.”
“This is a new beginning for our U.S. business,” Rob Sands, Constellation Brands’ president and CEO, said in Thursday’s statement, calling the new distribution agreements the culmination of an 18-month transformation within the giant company expected to pave the way for future growth.
Its largest operating unit, Constellation Wines U.S., recently reorganized into a single sales and marketing structure to align with this new distribution strategy, officials said Thursday. The U.S. portfolio includes brands like Robert Mondavi Winery, Clos du Bois, Blackstone, Woodbridge by Robert Mondavi, Arbor Mist, Estancia, Ravenswood, Kim Crawford, Toasted Head, Black Box, Black Velvet Canadian Whisky and Svedka vodka, many of them based in Northern California.
Overall, Constellation boasts 100 brands and sales in roughly 150 countries worldwide. But growth has slowed significantly in recent years, and the company is clearly taking major steps to change course.