Beer, wine propel growth at Constellation Brands

Constellation Brands Inc., the third-largest American wine company, sees no end to the boom in pinot noir as it looks to expand key labels such as Mark West and recently purchased Meiomi.

Rob Sands, Constellation Brands’ president and chief executive officer, was enthusiastic about the varietal during an investor call Wednesday to talk about the Victor, N.Y., company’s second-quarter earnings.

Constellation Brands reported net income of $302 million, or $1.49 a share, which was up 54 percent from the same period last year. Net sales rose 8 percent to $1.7 billion, primarily based on the performance of the company’s beer division and its two largest brands, Mexican imports Corona Extra and Modelo Especial. Wine sales rose 3 percent to $624.3 million.

The company, which owns Clos du Bois, Ravenswood, Simi and Robert Mondavi wineries, made news in the wine sector in July when it purchased the Napa Valley-based Meiomi wine brand for $315 million from Joe Wagner, looking to target consumers in the premium category at $20 or more per bottle.

Constellation Brands wants to expand Meiomi incrementally, Sands said. Sales rose more than 80 percent in the latest four-week period, he noted, citing data from IRI, which tracks retail sales. The brand’s gains are “contributing to the fact that our premium-plus dollar growth improved in recent periods,” he said.

At the time of the sale, Wagner said Meiomi was on pace to produce 830,000 cases annually, riding a wave of consumers who embraced the pinot noir’s sweet taste. That makes it one of only three brands at a $20 price point to sell more than 500,000 cases domestically, a list that also includes Santa Margherita from Italy and La Crema from Jackson Family Wines, according to analyst Jon Moramarco, a former Constellation Brands executive.

Sands was bullish on another brand in Constellation’s portfolio, Mark West, which it bought from Graton-based Purple Wine Co. in 2012 for $160 million. He said the brand, which is the country’s best-selling pinot noir and retails around $10, will launch this month Mark West Black “to take further advantage of the pinot noir craze.”

It also introduced a new brand named after Tom Gore, its director of vineyards for Sonoma and Mendocino counties, with fruit sourced from the Alexander Valley. “This brand resonates with consumers’ search with authenticity of the origin, ingredients and the people involved in what they eat and drink. We are very pleased with its preliminary results,” he said.

While this year’s North Coast harvest is expected to be below normal for a typical year, Sands said Constellation Brands did not have any problems with sourcing pinot noir grapes.

He did hint of a possibility that the price per bottle in the wine market could rise on the higher-end because there “hasn’t been a very robust market over a number of years in terms of pricing.”

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter?@BillSwindell.