Buffalo Trace and Southern Comfort owner Sazerac has snapped up Svedka vodka from Constellation Brands.
The deal, announced today (3 December) in a brief statement, is the latest disposal made by Constellation, which says it is aiming to focus on “higher-end wine and spirits brands”.
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Financial terms were not disclosed. Just Drinks has asked both parties for more details on the assets changing hands and the price Sazerac has agreed to pay.
In the statement, Sazerac CEO Jake Wenz said: “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 featuring their award-winning vodkas, seltzers, and gins.”
As well as Buffalo Trace and Southern Comfort, the Sazerac range includes its namesake Cognacs and whiskies, Black Magic rum and Wheatley vodka.
Constellation CFO Garth Hankinson is set to speak at an investor conference in the US today at which the company said he will discuss the deal in more detail.
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By GlobalDataThe company, home to spirits brands including Casa Noble Tequila and High West whiskey, said the sale of Svedka “builds on the company’s strategic efforts to further align the wine and spirits portfolio with evolving consumer preferences and growing market sectors”.
After asset disposals in recent years, Constellation says it is “focused on competing predominantly in premium and fine wine and craft spirits segments”.
In the statement, Constellation president and CEO Bill Newlands said: “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. This transaction is another step forward in seeking to ensure that our wine and spirits portfolio is optimised to succeed and to meet our growth objectives.”
In October, Newlands insisted Constellation was expecting “sequential improvement” from its wine-and-spirits business after another lacklustre quarter for the unit.
In the three months to the end of August, the US group’s second fiscal quarter, shipments from the wine-and-spirits division fell 9.8% to 5.5 million nine-litre cases. Depletions dropped 17.6%. Net sales sank 12% to $388.7m. The division also reported operating income of $70.5m, down 13% year-on-year.
Newlands noted there had been some “green shoots” in the second quarter across the “higher-end wine brands”, including Kim Crawford, Meiomi and The Prisoner, “as tactical pricing and marketing support actions we are taking in select markets began to drive better consumer takeaway trends”.
In September, Constellation updated its full-year outlook after revealing it was expecting an up to $2.5bn impairment on its wine-and-spirits unit. The company subsequently revealed that it suffered a non-cash goodwill impairment loss of $2.25bn in the quarter.
At the start of the year, Constellation announced the head of its wine and spirit division, Robert Hanson, was leaving the company in a “mutually agreed” move. The company promoted Sam Glaetzer, the senior VP of its global operations and international sales, to take the role.
