Constellation snaps up Beam Wine Estates
- Friday 16 November 2007
Beam - which includes Clos du Bois, Geyser Peak, Wild Horse and Buena Vista – was part of Fortune Brands, which retains Harvey’s Sherry and Cockburn’s Port as its only wine brands.
Constellation’s acquisition is considerable: the substantial Clos du Bois brand alone accounts for approximately 2m of the 2.6m total annual case sales for the brands included in the sale.
Fortune CEO Norm Wesley said the decision was made following a strategic review of its various assets, which include spirits brands like Courvoisier, Jim Beam and Sauza as well as Moen faucets and the Titleist golf brand.
‘Because the wine industry is lower margin and more capital intensive than spirits, it’s naturally a lower return segment relative to our spirits business,’ he said.
Although the Beam Wine Estates portfolio, like the wine business in general, might have offered a slower return on investment, it was still an attractive enough plum to lure multiple bidders. According to Beam Wine Estates spokesperson Mary Burnham, the Fortune Brands wine division had shown double-digit growth for each of the first three quarters of 2007.
With the Beam Wine Estates purchase, Constellation reinforces its position as the largest wine company in the US based on sales dollar value.
Constellation president and CEO Rob Sands called the acquisition ‘an excellent fit, that ‘will enhance our growing position in the US premium wine business.’