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Constellation Brands
Inc.
STZ 0.11%
a family business that has grown from a canned wine seller to a beverage giant who brewed Corona and who has bet on marijuana, gives the reins to a stranger for the first time.
Rob Sands, the third member of his family to run Victor, New York, will step down as chief executive on March 1, entrusting Constellation's future – and the success of its beer and cannabis bets – to one of his lieutenants, Bill Newlands.
During Mr. Sands' 11 years as Chief Executive Officer, Constellation's total shareholder return increased by 967%, compared to 141% for the S & P 500 Index. Mr. Sands, Aged 60 years old, will succeed his brother Richard as executive chairman. Richard Sands, former CEO of Constellation, will become Executive Vice President.
"It's good to have a new thought," said Rob Sands, a lawyer who started working for the company in 1986 at age 28 and became CEO in 2007. He will remain involved as executive chairman, including reviewing the $ 4 billion invested by Constellation. investment in a Canadian marijuana producer
Cover growth
Corp.
Mr. Newlands, 59, is a veteran alcoholic who previously held senior positions with what is now Beam Suntory Inc.
LVMH Moet Hennessy Louis Vuitton
and wine.com, where he was CEO. He joined Constellation in 2015 as Chief Growth Officer. He was promoted to president earlier this year.
In an interview, MM. Sands and Newlands said the company would continue its tradition of making big bets such as those that took it beyond wine and in beer and cannabis. "Our biggest challenge as a company is to fight complacency," said Sands.
Rob Sands' father, Marvin Sands, bought Canandaigua Industries in 1945, an eight-employee company that sold bulk wine in drums to bottlers on the east coast. The Canandaigua Wine Company Inc. went public in 1973 and was renamed Constellation in 2000.
In the 1990s, the family sought to expand its scale by taking over the low-margin brands, such as Almaden and Inglenook pitcher, that major liquor companies were seeking to sell. Then, the family went abroad with contracts for the acquisition of low-margin wine and spirits brands in the UK, Australia and elsewhere.
Rob Sands now believes that international expansion was a mistake. "We thought we were fine, but it was kind of crap, to use the vernacular," he said. "We sold a lot, but we made 25 cents a bottle."
Bill Newlands will assume the duties of Constellation CEO.
Photo:
Constellation Brands
When he took office as general manager, he decided to sell these brands in order to offer more high-end products. Constellation had bought premium Napa wines such as Robert Mondavi in 2004.
But it was a $ 5.3 billion contract in 2013 to acquire from
Anheuser-Busch InBev
in the United States the distribution rights of Corona and Modelo that have changed the trajectory of the company. Constellation's market value went from $ 6.3 billion in 2012 to $ 43 billion today.
Mexican imports were a positive point in the US beer market, while other major brewers struggled to reduce volumes as consumers swapped American lagers for wine and spirits. Beer accounted for 61% of Constellation's $ 7.6 billion in sales last year.
Mr. Newlands, who lives in Winnetka, Illinois, with his family and has traveled from one company to another, to Chicago, New York and California, said his company has been in business. to wait until, in a decade, cannabis is "an important part of the portfolio", but still room for its alcohol trade to develop. "We are almost betting on some of these things," he said. "It's one of the biggest calls for me."
Write to Jennifer Maloney at [email protected]
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