Liquor legend Constellation drops 6% — but jumps into hard seltzer
Good beer, bad cannabis... Constellation Brands already owns your one fancy buddy's liquor cabinet: High West whiskey, Ballast Point craft beer, Robert Mondavi wines, and Corona. But shares fell 6% because of its other vice: the $4B investment it made in the world's biggest pot company (Canopy Growth) dropped $1.3B in value over the last quarter. Even huge companies make bad stock investments.
Here, try this instead... A Corona-branded spiked seltzer. The experienced drinkers over at Constellation noticed that 90-calorie, anti-carb, alcohol-infused sparkling water had made "an impact" on their beer sales last summer. They also think the spiked seltzer trend is "here to stay," so they're making their own:
- 4 flavors: Mango, cherry, blackberry lime, and Tropical lime-flavored Corona Hard Seltzer.
- 1 trend: US sales of spiked seltzer nearly tripled over the last year to $295M.
You don’t just jump into a new category — you strategize into it... Constellation is targeting a specific area of spiked seltzer: Upscale. The execs believe there are laws when you're drinking White Claw, and that spiked seltzers will expand from low-end (where they are now) to high-end. Constellation doesn't like to play bottom-shelf, so its positioning Corona Hard Seltzer as your indulgent beachside date, not a bachelorette party default.