The Company is a leading international producer and marketer of beverage alcohol
brands with a broad portfolio across the wine, imported beer and spirits categories.
The Company has the largest wine business in the world and is the largest multi-category
supplier of beverage alcohol in the United States; a leading producer and exporter
of wine from Australia and New Zealand; and both a major producer and independent
drinks wholesaler in the United Kingdom. The Company’s strong market positions
increase its purchasing power and make the Company a supplier of choice to its
customers.
With its broad product portfolio, the Company believes it is distinctly positioned
to satisfy an array of consumer preferences across all beverage alcohol categories
and price points. Many of the Company’s products are recognized leaders in their
respective categories.
The Company has grown through a combination of internal growth and acquisitions.
The Company’s internal growth has been driven by leveraging the Company’s existing
portfolio of leading brands, developing new products, new packaging and line
extensions, and focusing on the faster growing sectors of the beverage alcohol
industry.
The Company has successfully integrated a number of major acquisitions that
have broadened its portfolio and increased its market share, net sales, operating
income and cash flow. Through these acquisitions, the Company has become more
competitive by: diversifying its portfolio; developing strong market positions
in the wine, imported beer and spirits categories; strengthening its relationships
with wholesalers and retailers; expanding its distribution and enhancing its
production capabilities; and acquiring additional management, operational, marketing,
and research and development expertise.
Competition
The beverage alcohol industry is highly competitive. The Company competes on
the basis of quality, price, brand recognition and distribution strength. The
Company’s beverage alcohol products compete with other alcoholic and nonalcoholic
beverages for consumer purchases, as well as shelf space in retail stores, restaurant
presence and wholesaler attention. The Company competes with numerous multinational
producers and distributors of beverage alcohol products, some of which may have
greater resources than the Company.
Constellation Wines’ principal wine competitors include: E & J Gallo Winery,
The Wine Group, Beringer Blass (Foster’s Group), and Kendall-Jackson in the
United States; Southcorp Wines, Orlando Wyndham (Pernod Ricard), and Beringer
Blass (Foster’s Group) in Australia; and Southcorp Wines, Diageo, E & J
Gallo Winery, and Pernod Ricard in the United Kingdom. Its wholesale business
competes with major brewers who also have wholesale operations, in particular,
Scottish Courage, Molson Coors, InBev and Carlsberg UK, and other independent
national and regional wholesalers. Constellation Wines’ principal cider competitor
is Scottish Courage.
Constellation Beers and Spirits’ principal competitors include: Heineken USA,
Molson Coors, Labatt USA (InBev) and Guinness Import Company (Diageo) in the
imported beer category as well as domestic producers such as Anheuser-Busch,
Molson Coors and SABMiller; and Diageo, Bacardi, Allied Domecq, Fortune Brands,
Brown-Forman, Pernod Ricard and Heaven Hill Distilleries in the distilled spirits
category.
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