A wine brand with only a 10-year heritage drove the majority of wine sales growth for Constellation in the Robert Mondavi brand owner's first quarter of its financial year.
Its new life with the Robert Mondavi owner appears to have begun well, after Constellation today (30 June) reported a 90% increase in IRI-measured dollar sales of Meiomi in the first quarter of its financial year, to the end of May.
Meiomi sales hit $35.3m for the three months.
That’s still small in the context of Constellation’s total $720.8m wine and spirits sales over the same period.
But its figures show that Meiomi accounted for nearly two thirds of the firm’s reported 8% sales growth in wine and spirits versus the same period of its last financial year.
That isn’t bad for a wine brand only founded in 2006. Meiomi has risen to prominence on the wave of Pinot Noir interest in the US in the past decade, and is particularly interesting to Constellation because of its premium credentials – selling for an average $22 per bottle at the time of acquisition.
Depletions of Meiomi – which means sales from distributors to retailers – rose by double digit percentage figures for Constellation’s first quarter; suggesting the trade believes consumer demand is still high.
One former Constellation executive told Decanter.com recently that the company’s strategy regarding acquisitions was very simple.
It bought small, promising brands with scale-able production and then relied on an extensive distribution network to expand sales.
A past criticism of Constellation in some circles was that it relied too heavily on acquisitions for wine growth.
But investors appeared happy enough this week, with Constellation’s share price up by 2% in early trading after the results. Company net profits rose by 33% in the first quarter, to $318.3m.
Albeit, beer is more important than wine these days to company sales. Beer net sales hit $1.15bn for the first quarter.
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