Constellation Brands (STZ) delivered a mixed performance in its second quarter, with softness in wine and spirits offset by sustained strength in beer sales. CEO Bill Newlands appeared on Catalysts to discuss the company’s strategy amid shifting consumer dynamics. He expressed confidence in a recovery, stating, “We’re optimistic that things are going to get better.” Notably, he pointed to the September jobs report, which indicated a rise in unemployment among Hispanic workers to 5.1%, a demographic crucial to the company’s customer base. Despite economic pressures, Newlands emphasized the strong brand loyalty within this group, noting that beer remains a staple in their lifestyle. However, he acknowledged that tighter budgets lead consumers to favor value-oriented purchases, such as multi-packs. On evolving drinking habits, he observed a shift toward alternating between alcoholic and non-alcoholic beverages rather than overall consumption decline. He credited advancements in flavor and quality for the growth of non-alcoholic options. “Our main priority now is enhancing business performance and operational efficiency,” Newlands said, adding that early signs of progress are emerging after six months into a 9- to 12-month turnaround plan.
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We ‘re focused on improving performance, operations: Constellation Brands CEO
Constellation Brands (STZ) posted mixed second-quarter results, showing weakness in its wine and spirits segment while maintaining strong demand for beer products. CEO Bill Newlands joins Catalysts to discuss the company ‘s operations and current challenges. Despite the mixed report, Newlands remains “optimistic that things are going to get better.” He references the recent jobs report, which showed Hispanic unemployment rising to 5.1% in September, noting the significance as the Hispanic community comprises a major portion of their customer base. “The fortunate part for us with a Hispanic customer is there ‘s great brand loyalty and they view beer as really a fundamental in what they do with their lifestyle, so that ‘s very helpful. But there ‘s no question that if things are tight or there ‘s concerns, that people get a little bit careful and they tend to buy more value packs,” he explains. Regarding generational shifts in alcohol consumption, Newlands observes, “You are seeing a little bit of change,” though it ‘s more about interchanging between alcoholic and non-alcoholic options rather than decreased drinking overall. He highlights that improved taste quality in non-alcoholic alternatives has driven significant growth in that segment. “Our focus right now is on improving the performance and the operating performance of the business. At the start of the year, I said it ‘s going to take us 9-12 months to get things back in order, and we ‘re 6 months into that program. We ‘re starting to see some good green shoots,” he tells Yahoo Finance. For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Angel Smith