Beer is booming for Constellation Brands, particularly its Modello brands,the Victor-based company shared in an annual financial report Friday.
Gains over the previous year resulted in a dividend of 75 cents per Class A share and 68 cents per Class B stock. Sales were up 5.9 percent overall in fiscal 2020, which ended Feb. 19 for Constellation.
Results for the last quarter of the year were $2.06 per share, which came in 41 cents per share above the company’s predictions.
The news wasn’t quite as bright for wine and spirits over the course of the year, though. While beer sales were up 8 percent over the previous year, wine and spirits sales were down 6.4 percent.
But with people turning to alcohol of many types to steady their nerves during the COVID-19 pandemic, Constellation’s new fiscal year is off to a running start. Off-premise consumption of beer, accounting for 85 percent of beer sales, have increased 24 percent in the last four weeks said CEO Bill Newlands. Wine and spirits have seen a 23 percent jump in that time frame.
The company experienced a loss of $41.5 million in the fourth quarter from its investment of Canopy Growth, the Canandian cannabis operation, and expects losses to continue in the new fiscal year, due to the closure of greenhouse facilities.
Meanwhile, Constellation said it is making progress on another glass plant in Mexicali, Mexico, to supply its brewery there. Despite the pandemic, breweries continue to operate in the US, Italy, Mexico and New Zealand, Newlands said.
Modello is now the top beer brand in Chicago, Nevada and California, Newlands reported, and Constellation will continue to boost the brand with marketing including Spanish-language promotions.
In an apples-to-oranges comparison, the annual report said Constellations premium wines are selling better than the entire wine category in the United States, but noted those wines are doing well compared to other premium wines, too. Before the pandemic hit, Constellation was expecting growth of about 7 to 8 percent in its beer business, but losses to 30 percent and more in wine as it sold off more less-than-premium lines. However, because of the health crisis and the economic uncertainty it is causing, the company did not issue any predictions for Fiscal 2021.
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