Constellation Brands Acquires US Craft Whiskey Maker for $160m
06 Oct 2016 --- Constellation Brands has purchased the craft whiskey maker High West Distillery for $160m as it reports that revenues in its second quarter were up 17 percent to $2.02bn.
The acquisition, which marks Constellation’s latest acquisition in the premium alcohol area, after previously acquiring the luxury winemaker Prisoner Wine Co and the craft beer company Ballast Point, establishes it in the growing bourbon and rye segments.
Utah-based High West Distillery, set up in 2004, has reported double-digit volume growth every year for the past three years and sells around 70,000 cases every year across the portfolio. It has around 200 employees who will stay with the company.
It has a reputation for blending rye with other whiskeys to create new flavors and its brands include American Prairie Bourbon and High West Double Rye.
"High West's whiskeys are high-end, distinctive and delicious - perfect for today's knowledgeable consumer who enjoys artfully crafted whiskeys," said Bill Newlands, president, wine and spirits division, Constellation Brands.
"With the addition of High West, Constellation Brands bolsters its position in the dynamic and growing craft spirits category. We look forward to welcoming this creative and talented team to Constellation Brands as we work together to drive growth for High West and build our premium spirits portfolio with brands that consumers love."
"Our award-winning whiskeys are artfully blended to create unique and complex flavors inspired by the Old West," said John Esposito, chief executive officer, High West.
"We craft innovative whiskey blends that reflect our sense of adventure and pioneering spirit. When it came to the next step for High West, we wanted to work with the right partner that will help us grow further while maintaining our culture and core values. With the strength of the Constellation Brands team, we will be able to reach more consumers and continue our track record of innovation."
Separately, Constellation Brands has reported that sales and profits were ahead of expectations in the second quarter.
Revenues increased year-on-year from $1.96bn to $2.02bn while income was up from $302m to $359m, helped by a 20 percent increase in beer sales and a 12 percent jump in wine and spirit sales.
“During the quarter, we gained share and improved margins across our business, while continuing to make smart investments designed to fuel growth today and in the future,” Rob Sands, Constellation Brands president and CEO, said.
“During the second quarter, our beer business contributed 60 percent of category dollar growth for the U.S. beer industry and continues to outperform the high end of the market, with accelerating growth trends versus the previous quarter, and overall share gains driven by Corona Extra and Modelo Especial.”
by John Reynolds
