STZ Consolidates Distribution

Constellation Brands Inc. (STZ - Analyst Report), the world’s leading wine company, has signed a multiyear distribution agreement with Young’s Market Co. and its affiliates (Young’s) as the company’s exclusive distributor in Alaska, Washington and Oregon. Young’s, a recognized market leader in the Pacific Northwest, already has a longstanding business relationship with Constellation. With more than 1 million cases sold annually, Constellation is currently Young’s largest supplier in volume in the Pacific Northwest.

The company has recently signed a multi-year agreement with distributors to consolidate its network in the U.S. for better sales efforts. The main objectives of this realignment are improving organic growth, creating distributor teams focused exclusively on Constellation’s portfolio, and improving the coordination of marketing and promotional programs to support the brands.  Constellation is also in the process of rolling out an enhanced incentive structure for the distributors to drive organic growth.

This agreement is therefore, a part of the company’s ongoing realignment of its distributor network and benefits almost 22 states, with 8 potential markets remaining.

In addition, the company has also recently divested its low margin value spirits business and entered into a joint venture for marketing imported beer in the U.S. Constellation is also undertaking various restructuring initiatives to streamline operations in an effort to save costs.

Constellation Brands’ largest operating company, Constellation Wines U.S., has a solid portfolio of wine and spirits, including iconic brands such as Robert Mondavi Winery, Clos du Bois, Blackstone, Woodbridge by Robert Mondavi, Arbor Mist, Estancia, Ravenswood, Kim Crawford, Toasted Head, Black Box, Black Velvet Canadian Whisky and SVEDKA Vodka.