America’s biggest alcohol trend? Expensive booze

Constellation Brands

Constellation Brands CEO Rob Sands says Americans have shifted their taste profiles to more expensive, premium alcohol.

Constellation owns brands such as Corona, Ballast Point, and Svedka Vodka.

“You know, you look at wine, and clearly all the big growth in wine right now is in these higher price points like The Prisoner,” said Sands in a quarterly conference call Wednesday. “You look at beer, it’s almost the same in that it’s better beer and higher price points that are driving that market.”

Sands highlights the company’s recent acquisition of Ballast Point, a craft brewer.

“I think Ballast Point is a great example of that. I mean, that’s like at the highest end of the beer market and it’s got the fastest growth of any major craft brewer,” said Sands. “It’s almost a little contradictory in the sense that it would be the highest price and have the highest growth, but that’s what makes it as attractive as it is.”

With the explosion of the craft brew and craft spirits businesses in the United States, the increase in premium beverages spans well beyond Constellation Brands.

Beverage sales

“But craft spirits much like craft beers is pretty interesting, but much more developmental in that the craft spirits business is much less developed than the craft beer, and the brands are even smaller, okay, than in craft beer,” said Sands.

Sands doesn’t explain why Americans are trading up, but he believes the trend will continue and his company plans to continue to capitalize on growing trends towards premium products.

“It’s also strategic in that you know, clearly premiumization is an important part of the strategy whether it’s wine, beer, or spirits,” he said. “Margin enhancement is important to us as we look at various opportunities across the three segments.”