Constellation Brands CEO Says Company Will Generate $1 Billion by End of Year


 
 
12:30 04/05/2019

Corona beer maker Constellation Brands STZ  may be looking forward to a great year according to the company's CEO.

CEO Bill Newlands was on CNBC this week talking to the host of 'Mad Money,' Jim Cramer, about his lofty expectations for the company's revenue in 2019.

According to Newlands, Constellation can generate $1 billion by the end of the year.

He said, 'If you look at Canada alone, Canada is on a run rate of $5 [billion] to $6 billion in sales, and Canopy is the leading player in that market.'

It was last fall that the company announced that it was buying 104.5 million shares of Canopy Growth CGC , a Canadian marijuana company, for a whopping $4 billion. Constellation now has a 38% stake in Canopy, the largest medical marijuana producer in Canada.

'Then you add in new form factors later this year in things like beverage and other edibles, we think the sky’s the limit. This is going to be a big business, and Canopy is going to be the leader,' Newlands continued.

He proclaimed, 'This is going to be a big business, and Canopy is going to be the leader.'

He also said, 'We’ve got a very strong team in beer and we got a very strong team in wine. We think we’re pretty good position to win on all three of those fronts.'“Canopy is focused on what they’re going to do to build the right form factors and the right markets to win across the globe as necessary and as [marijuana] becomes legal,” said the CEO. “We’ve got a very strong team in beer and we got a very strong team in wine. We think we’re pretty good position to win on all three of those fronts.”

Constellation will also be divesting 30 of its brands, mostly wines that cost under $11 a bottle, to E. & J. Gallo for $1.7 billion.

Newlands said the move is to “better align portfolio with consumer premiumization trends.”

“This move will help us drive focus on a smaller set of premium, high-growth brands that have gained significant momentum in the marketplace. These brands more closely align with consumer premiumization trends, as they continue to shift to higher-end, higher-quality products like the Prisoner, Kim Crawford, Meiomi, Schrader, High West Whiskey, Casa Noble and SVEDKA Vodka [to name a few],” said Michael McGrew, senior vice president of corporate communications in Constellation Brands’ Chicago office.




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