Constellation Brands Divests Meiomi and Woodbridge: A Strategic Sale to The Wine Group

Constellation Brands is significantly restructuring its wine business by selling a portfolio of mostly value-priced wine brands to The Wine Group. This sale involves 12 million cases and includes notable brands like Meiomi, Woodbridge, and Robert Mondavi Private Selection. The transaction, which is pending regulatory approval, is expected to finalize after Constellation’s fiscal first quarter ends in May.

The Wine Group, recognized for brands such as Franzia and Cupcake, aims to enhance its product lineup with these purchases, which also encompass production facilities in Lodi, Monterey County, and Healdsburg, along with control over 6,600 vineyard acres in California. John Sutton, CEO of The Wine Group, emphasized their commitment to providing a diverse portfolio that meets evolving consumer tastes.

In contrast, Constellation is pivoting its focus toward luxury wine brands following the sale. The company aims to consolidate its offerings to higher-end wines, maintaining brands like Robert Mondavi Winery and Schrader. This strategy aligns with Constellation’s long-term goal to elevate its wine and spirits portfolio, which will now account for roughly 5 million cases a year focusing entirely on premium products.

Despite previous speculation that Constellation might exit the wine industry entirely, the company instead appears dedicated to refining its focus. This follows a trend where they had previously sold off many lower-tier brands to regain a foothold in the luxury segment, particularly after acquiring Meiomi for $315 million in 2015 during its peak sales popularity.

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