Increases prominence in fast-growing Washington State wines
VICTOR, N.Y., Oct. 17, 2016 – Constellation Brands, Inc. (NYSE: STZ and STZ.B), a leading beverage alcohol company, today announced an agreement with Charles Smith Wines LLC to acquire the Charles Smith Wines collection of five super and ultra premium wines for approximately $120 million. The transaction, expected to close in October, includes Kung Fu Girl Riesling, Velvet Devil Merlot, Boom Boom! Syrah, Eve Chardonnay and Chateau Smith Cabernet Sauvignon. With this acquisition, Constellation Brands will solidify its position as the second leading supplier of Washington State wines, gaining a collection of high quality wines that have strong consumer affinity and demand, and have shown double-digit volume growth over the last three years.
Charles Smith started the core collection of Charles Smith Wines in 2006 with the goal to create high quality, varietal specific wines true to the place of origin at a price point for everyone to enjoy. These Washington State wines are full of flavor, balanced and approachable, and have consistently garnered 90+ scores by leading industry critics. The largest wine, Kung Fu Girl, is the #2 super premium Riesling growing retail sales at 45 percent over the last year. The wine has scored 90+ points for the past seven vintages and has been twice named a Wine Spectator Top 100 wine. Boom Boom! Syrah is the #1 ultra premium Syrah with IRI dollar sales growth of more than 50 percent while Velvet Devil Merlot is the #2 super premium Washington State Merlot and is outpacing sales growth of the leading brand in this category.*
Smith will assist Constellation Brands under a consulting agreement as winemaker to maintain the high quality and consistency of the wines and will work with Constellation Brands to help drive further innovation across its wine portfolio. Wine Enthusiast named Smith, a former rock band manager, Winemaker of the Year in 2014 and Food & Wine bestowed the same honor in 2009.
“Charles Smith is a visionary in the wine business and we are excited to welcome him to Constellation Brands and bring these wines to a larger audience,” said Bill Newlands, president, wine and spirits division, Constellation Brands. “With the addition of this collection, we strengthen our core wine portfolio and augment our innovation capabilities to stay ahead of consumer trends. I am looking forward to working with Charles and tapping into his creative genius to fuel our wine innovation.”
“I created Charles Smith Wines so that everyone could experience a great tasting, quality wine, at an affordable price,” said founder Charles Smith. “The quality of grapes in Washington State is incredible, and I have been able to put the best wines I can in a bottle for people to enjoy. Constellation Brands has a proven track record of acquiring and working with brands and companies to help them reach the next level. With Constellation Brands, we now have the opportunity to share these wines with the world.”
The wines are sourced from prime vineyards across Columbia Valley and are produced in several custom crush facilities in Washington. Sustainable practices are utilized in both the vineyards and in the winemaking process for all of these wines. The following wines are not included in this deal and will continue to be nurtured and developed by Charles Smith’s company: K Vintners, Wines of Substance, ViNO, Casa Smith, SIXTO, B. Leighton and Charles & Charles.
* IRI, Total US Multi-Outlet and Convenience, 52 weeks ending 9/4/16
About Constellation Brands
Constellation Brands (NYSE: STZ and STZ.B) is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Canada, Mexico, New Zealand and Italy. Constellation is a Fortune 500® company and one of the top performing stocks in the S&P 500 Consumer Staples Index. Constellation is the No. 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. The company’s beer portfolio also includes Ballast Point, one of the most awarded craft brewers in the U.S. In addition, Constellation is the world’s leader in premium wine, selling great brands that people love, including Robert Mondavi, Clos du Bois, Kim Crawford, Meiomi, Mark West, Franciscan Estate, Ruffino and Jackson-Triggs. The company’s premium spirits brands include SVEDKA Vodka and Casa Noble Tequila.
Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Founded in 1945, Constellation has grown to become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio, sales in approximately 100 countries, about 40 facilities and approximately 9,000 talented employees. We express our company vision: to elevate life with every glass raised. To learn more, visit www.cbrands.com.
About Charles Smith
Started in Walla Walla, Washington, in the late 1990’s, award-winning winemaker Charles Smith’s portfolio of wines includes Wines of Substance, ViNO, K Vintners, SIXTO, Casa Smith, B. Leighton and one-half of Charles & Charles. In 2015, the Charles Smith footprint broadened to Seattle with the opening of Jet City, the largest urban winery on the west coast, that has attracted tens of thousands of visitors since its debut. Charles Smith is the only person to have received Winemaker of the Year distinctions by both Wine Enthusiast (2014) and Food & Wine (2009). His wines continue to receive broad recognition from leading wine publications such as Wine Advocate, Wine Spectator, Wine Enthusiast and Wine & Spirits with 98 scores of 95 points and above, and more than 386 scores of 90 points and above. For more information visit http://www.kvintners.com/.
This news release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These statements may relate to business strategy, future operations, prospects, plans and objectives of management, as well as information concerning expected actions of third parties. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. The forward-looking statements are based on management’s current expectations. All forward-looking statements speak only as of the date of this news release and Constellation Brands undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The proposed transaction with Charles Smith Wines LLC is subject to certain closing conditions, including receipt of regulatory approval, and there can be no assurance the transaction will occur or will occur on the terms and timetable contemplated hereby.
In addition to risks and uncertainties associated with ordinary business operations, the forward-looking statements contained in this news release are subject to other risks and uncertainties, including factors and uncertainties disclosed from time-to-time in Constellation Brands, Inc.’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended Feb. 29, 2016, which could cause actual future performance to differ from current expectations.
Source: Constellation Brands