Constellation Brands ready to sell its entire wine division. How the crisis has shaken the US wine giant

Wine is struggling, with double-digit declines in 2024, while beer continues to grow. This market situation is reportedly leading Constellation Brands, one of the world's largest groups in the production and distribution of wine, spirits, and beer, to consider selling its entire wine division, which includes major brands such as Robert Mondavi, Simi Winery, Lingua Franca, and Meiomi.

Reports in the press about the historic group, founded by Marvin Sands in New York in 1945, intending to step back have been gaining traction. In recent days, industry publication Wine Business wrote about the matter, highlighting (without citing direct sources) that two companies are ready to negotiate a potential acquisition. These are Delicato Family Wines (for the companies located in Central Valley) and The Duckhorn (recently acquired by the fund Butterfly Equity, which would take over the businesses on the coast).

Last summer, Constellation’s leadership had hinted at the possibility of selling off some non-strategic wine brands, including vineyards, to offset losses in the sector, particularly in light of the acquisition (spring 2024) of the Californian winery Sea Smoke, in Santa Barbara County. However, the scale of the sale now appears to extend far beyond just “non-core” activities.

The struggling wine market

The possibility of a rapid divestment by Constellation, which boasts a portfolio of over 100 beverage brands, is weighed down by the significant challenges in the wine sector, which has been a negative performer in 2024, with an annual decline of 14% in value (to $430 million), recorded in the quarter ending in November, alongside a drop of over 16% in sales volumes. Even spirits have seen a sharp decline in sales.

At the same time, in Constellation’s financial results—where the company is attempting to recover in the stock market after a major share price drop in January 2025—the beer brands in its portfolio (including Corona and, above all, Modelo, which has become the most popular brand in the US) have recorded growth of 1.6% in volume and 3% in value (to $2 billion).

The distributor crisis

Constellation Brands, however, has not denied the rumours of a sell-off. Nor have any comments been made by the potential buyers. In any case, the overall situation in the US market appears highly complex, particularly in light of the heavy tariffs announced by President Donald Trump, set to take effect from next April, on European products, including agricultural and agri-food goods.

According to Sip Source data, overall wine sales in the US market fell by 6% in volume and 4% in value in 2024. And distributors are also struggling. Testimonies from employees at Southern Glazer’s regarding job cuts in the wine segment—with a reduction of 3,000 staff in the country’s largest distributor—stand as clear evidence of this.