Constellation Brands Sells Svedka Vodka to Sazerac Amid Strategic Portfolio Shift

Constellation Brands announced Tuesday that it will sell its Svedka vodka brand to New Orleans-based Sazerac, as part of a strategic move to optimize its wine and spirits portfolio amid declining performance in the segment.

• The deal is anticipated to close within the coming months, though the financial terms were not disclosed.
• Bill Newlands, Constellation’s CEO, described the transaction as aligning with efforts to reshape the portfolio for growth, adding, “This transaction is another step forward in seeking to ensure that our wine and spirits portfolio is optimized to succeed.”
• Constellation’s wine and spirits business has struggled compared to its thriving beer portfolio, which includes bestsellers Modelo and Corona.
  • Shipments for the segment fell by 9.8% year-over-year in Q2.
  • Net sales and operating income dropped 12% and 13%, respectively.
• CEO Newlands cited headwinds in the lower-priced wine and spirits category as a persistent challenge during the company’s October earnings call.
• Despite accounting for only 5% of Constellation’s total volumes in 2023, wine and spirits contributed 17% of net sales, with wine taking the lion’s share at 86% compared to 14% from spirits.
• Sazerac will integrate Svedka into its diverse portfolio, which already includes global brands such as:
• Buffalo Trace bourbon
• Fireball Cinnamon Whisky
• Southern Comfort
• Constellation will retain key spirits labels, including:
• High West Whiskey
• Mi Campo Tequila
• Casa Noble Tequila