07.23.20

Bill Newlands' Shareholder Letter

Read Bill Newlands’ full 2020 annual shareholder letter in an interactive format, as well as learn more about our daring path forward, by visiting our 2020 digital company profile.


OUR AMBITION REMAINS UNCHANGED

As we celebrate our 75th anniversary, the values established by our founder Marvin Sands centered around people, integrity, quality, entrepreneurship, and customers continue to guide our actions and fuel our success. In fiscal 2020, Constellation Brands delivered another strong performance that generated record cash flow, enabling our company to reduce outstanding debt by $1.4 billion and return more than $600 million to shareholders in dividends and share repurchases. As we enter a new year, we continue to be optimistic about our future and remain well-positioned for long-term, sustainable growth. Our ambition remains unchanged. We are consumer obsessed and continue to focus on building industry-leading brands people love. This relentless pursuit of our mission has driven our success since our company’s inception and will continue fueling our growth in the years ahead. As part of our strategy, we continue to evolve our portfolio to align with consumer-led premiumization trends and offer a collection of higher-end brands that meet consumers’ needs. We leverage our consumer-obsessed culture to fuel creative innovation and build a pipeline of products with the potential to become our big brands of tomorrow. Our commercial teams work tirelessly alongside our distributor and retailer partners to deliver world-class execution at retail. And our production teams in the U.S., Mexico, Italy, and New Zealand continue to drive operational excellence by delivering the highest quality products in a highly efficient and sustainable manner, to the right markets, in the right quantities, at the right time.


FASTEST GROWING LARGE CPG COMPANY

For the third consecutive year, Constellation Brands was the fastest growing large CPG company(1) and continues to be a top contributor for dollar sales growth at retail for beverage alcohol. (2)

#1 IMPORTED BEER BRAND FAMILY

Our flagship Corona Brand Family remains the #1 imported beer brand family in the U.S.(3)

#4 BEER BRAND OVERALL IN THE U.S.

Modelo Especial is now the #4 brand overall and the best-selling beer in Chicago, Nevada and California, where sales are greater than the top two domestic premium light beers combined.(3)


For the third consecutive year, Constellation Brands was the fastest growing large CPG company(1) in the U.S. and a top contributor of dollar sales growth at retail for beverage alcohol. (2)

BEER

Our beer business, led by our iconic Corona and Modelo Brand Families, reinforced its position as a leader in the U.S. beer market. (3)

WINE & SPIRITS

Our wine and spirits consumer-led premiumization strategy continued to gain momentum, with our higher-end power brands, including Kim Crawford, Meiomi, and The Prisoner Brand Family, outperforming the U.S. wine category. (4)

CANOPY GROWTH CORPORATION

And, with strong leadership at the helm, we believe Canopy Growth remains best-positioned to win long-term as the global cannabis market evolves.(5)

THE FOUNDATION FOR OUR SUCCESS

Without a doubt, the foundation for our success is our people. I am extremely proud of not only what our team has accomplished, but how they’ve done it. Over the years, we’ve built a culture that drives superior results the right way, never losing sight of our broader responsibilities to also care for our communities and environment. Our increased focus on corporate social responsibility and COVID-19 efforts are recent examples. Social distancing and safety measures required many businesses such as restaurants and bars to temporarily close, resulting in millions of people without work. We felt it was important to support those that have supported our brands and served our customers and communities throughout the years, so Constellation and our family of brands contributed almost $4 million to help industry partners and communities most in need during the health crisis. We hope our contributions are helping to pave a path of recovery. You can learn more about our specific efforts in our company profile at https://companyprofile.cbrands.com/. As we go through this period of uncertainty, the fundamentals of our business remain strong, our brands remain healthy, and we remain committed to our proven strategy focused on long-term, profitable, and sustainable growth. Few companies have achieved the level of success we’ve realized over the years. I want to thank our employees, partners, and shareholders for your continued confidence and support as we press forward to deliver what’s next.

Bill Newlands President & CEO

(1) Source: IRI data for multi-outlet and convenience (MULO+C). IRI Consulting & BCG analysis. Extra Small = <$100M, Small = ><$1B, Medium = $1B–$5.5B, Large >$5.5B (2) Source: IRI, Total U.S. Multi-Outlet + Convenience; reflects growth, 52 weeks ending February 23, 2020 against the comparable prior year period; National Alcohol Beverage Control Association (NABCA), 12 months ending February 2020; TBA = Total Beverage Alcohol (3) Source: IRI, Total U.S. Multi-Outlet + Convenience for the 52 weeks ending February 23, 2020 (4) Source: IRI, Total U.S. Multi-Outlet + Convenience, 52 weeks ending February 23, 2020; higher-end wine defined as >$11 per bottle at retail for table wine and >$13 for sparkling wine (5) Source: Canopy Growth third quarter fiscal 2020 company information