Constellation Brands to divest Svedka Vodka to Sazerac
USA – Constellation Brands has announced its decision to sell its Svedka vodka brand to New Orleans-based spirits company Sazerac, marking another step in its ongoing efforts to reshape its wine and spirits portfolio.
The transaction, whose value has not been disclosed, is expected to close in the coming months, pending customary regulatory approvals.
Constellation CEO Bill Newlands highlighted the move as part of the company’s strategy to optimize its wine and spirits segment for growth.
“The actions we have taken over the past several years to reshape our wine and spirits portfolio support our efforts to accelerate the performance of that business,” Newlands stated.
“This transaction is another step forward in seeking to ensure that our wine and spirits portfolio is optimized to succeed and to meet our growth objectives.”
Svedka has been part of Constellation’s portfolio since 2007, when it acquired Spirits Marque One LLC for US$384 million.
Sazerac, known for its extensive portfolio, including Buffalo Trace bourbon and Fireball Cinnamon Whisky, will now add Svedka’s award-winning vodkas, seltzers, and gins to its lineup.
Sazerac CEO Jake Wenz praised the brand’s legacy, saying, “The team at Constellation has built the Svedka brand over the years to be known for its high-quality vodka-making traditions, premium liquid standards, and flavour innovation. We are honoured for this opportunity and excited to add Svedka to our global spirits portfolio.”
Constellation’s wine and spirits business has faced challenges in recent years, with lower-priced segments experiencing headwinds.
In the second quarter of 2024, the company reported a 9.8 percent year-over-year decline in wine and spirits shipments, with net sales and operating income for the segment dropping 12 percent and 13 percent, respectively.
Despite accounting for only 5 percent of Constellation’s volumes this year, wine and spirits contributed 17 percent of net sales, with the majority driven by wine.
In September, Constellation projected an impairment of up to US$2.5 billion on its wine and spirits unit and reported a non-cash goodwill impairment loss of US$2.25 billion for the quarter.
Following the divestiture, Constellation’s spirits portfolio will retain brands such as High West Whiskey, Mi Campo Tequila, and Casa Noble Tequila.
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