Diving overview:
- Constellation Brands will sell its Svedka vodka brand to Sazerac, maker of Fireball and Southern Comfort. Financial details were not disclosed, but the deal is expected to close in the coming months.
- Corona Distillers said the decision follows the sale of most of its popular wine and spirits brands in recent years as it focuses on fine wines and craft spirits.
- Faced with declining alcohol consumption, alcohol manufacturers are choosing to sell some of their lower-priced products while maintaining their fast-growing premium brands.
Dive Insights:
Bill Newlands, CEO of Constellation Brands, said the sale reflects the company’s evolving approach to spirits.
“This transaction is another step in our efforts to ensure our wine and spirits portfolio is optimized to succeed and achieve our growth objectives,” Newlands said.
For Sazerac, the Svedka acquisition gives the Louisiana-based company another product to add to its portfolio of more than 500 brands as it increases its share of the spirits market. This follows the company’s addition of RTD cocktail maker BuzzBallz earlier this year and whiskey makers Athrú and Hazelwood Demense in 2022.
Sales of vodka, still the best-selling spirit in the U.S., fell 2% in 2023, according to figures from Impact Databank cited by Market Watch. That’s because tequila and ready-to-drink cocktails are popular.
In 2022 witness According to VinePair, VinePair was the fourth best-selling vodka brand by U.S. sales, behind Tito’s, Smirnoff and New Amsterdam.
Other alcohol producers are focusing their efforts on expanding their premium portfolios. Molson Coors is “aggressively” pursuing premium spirits, CEO Gavin Hattersley told investors last year. It comes after the drinks giant announced a decline in sales of its lucrative beer business. Guinness maker Diageo is also focusing on premium spirits after introducing a new business unit last month focused on higher-priced brands.
Constellation has also taken steps to strengthen its position in the fine wine category, including purchasing Santa Barbara winery Sea Smoke for an undisclosed sum this spring and acquiring Ayesha Curry’s premium Napa Valley brand Domaine Curry in 2023.
