Constellation's Neverending Wine Story
- Richard Westcott
- Apr 12
- 4 min read
Constellation's decision to offload its wine resources has taken another turn and the end isn't in sight just yet.
W. Blake Gray·Last updated 11-Apr-2025
Constellation's planned sale of its wine brands turns out to be a lot like Trump's tariffs: not quite as big as threatened. Yet.
Last month, Wine Business reported a rumor that Constellation was hoping to unload its entire wine portfolio to focus on its successful Mexican beer brands. Instead, the New York-based wine producer announced on Wednesday an agreement to sell just six major wine brands, as well as some buildings and vineyards.
Constellation is selling some big sellers: Woodbridge, Meiomi, Simi, Robert Mondavi Private Selection, Cook's and J. Roget. But it's keeping most of its high-end wines, for now. Just like Trump's tariffs, who knows what will happen tomorrow? Wine Business' story last month had Constellation's bottom-shelf wines going to one company and its high-end wines going to another. That could still happen.
The buyer is different than last month's rumor. The Wine Group, the nation's second-largest wine company, announced in a press release that it will snatch up the six brands, as well as wine factories in Lodi and Monterey County and the Simi winery in Healdsburg. The deal also comes with 6600 "owned and leased" acres of vineyards throughout California. The price has not yet been disclosed, but Constellation is publicly traded, so it will be.
An interesting way of looking at the deal is that, defying logic, it allows both companies to move upscale. Constellation gets to unload more of its low-end portfolio, which it has been doing for several years now.
The Wine Group competes with Gallo for the supermarket's bottom shelf, and will happily absorb some more big selling brands. But it also gets Simi and Meiomi, which were medium-range for Constellation, yet will become the two biggest stars of The Wine Group's small higher-end portfolio. Currently The Wine Group's highest-end wines are Imagery and Benziger, neither of which is anywhere near as well known as popular Pinot Noir producer Meiomi.
The Wine Group produces 40 million cases a year but operates mostly under the radar both because that's its corporate culture (TWG rarely speaks to the media) and its lack of a flagship. You might recognize its brands Cupcake, Big House, 7 Deadly Zins and MD 20/20. The company is based in Livermore, an exurban community of San Francisco that has been producing wine since the 1800s. In 2004 The Wine Group bought Livermore's Concannon Vineyard in its first attempt to move upscale. But the Wente Family is apparently the only company capable of leading its national portfolio with Livermore. Last year, The Wine Group sold Concannon to local owners that include its former CEO, David Kent.
Competition blues
This week's deal is only possible because an agreement made by Constellation during the Biden administration expired.
In 2021, Constellation sold 30 low-end wine brands to Gallo for $810 million. But Biden's Federal Trade Commission blocked the sale of Cook's "California Champagne" to Gallo because Gallo also owns André, and the two compete at the very bottom end of the sparkling wine market. The FTC required Constellation to hold onto Cook's for four years; that stipulation ended this month. Constellation shouldn't have to worry about the FTC on this deal for two reasons: now Cook's is going to a company that competes with Gallo, but even if it wasn't, the leadership of the FTC has changed.
The rumor that Wine Business reported last month, in a story without named sources, had Constellation's low-end wines going to Delicato and its high-end wines going to Duckhorn. Full disclosure: I also write for Wine Business, but I am not in their newsroom and know nothing about their sourcing of the story. But I'm not just defending them when I say maybe Wine Business wasn't wrong, and maybe it still isn't. Stories like that are leaked for a reason. Sometimes that reason is to see if there are better offers from a different company. Perhaps The Wine Group placed a higher bid for these brands, and perhaps Constellation's other brands are still available.
Both The Wine Group and Constellation acknowledged the deal, with Constellation President and CEO Bill Newlands saying in a statement that it's part of a "multi-year strategy to reconfigure our business". But neither company would speak to reporters yesterday before the deal is finalized.
Because Constellation is publicly traded, it's no secret that 78 percent of its net sales now come from its three Mexican beer brands: Modelo, Corona and Pacifico. Constellation buys and sells brands rather ruthlessly and its leaders may have decided wine is a distraction. In its January earnings report, the company said it expects to invest $3 billion in upgrading its Mexican brewing facilities. For now, it still retains some very popular brands in The Prisoner, Kim Crawford and Ruffino as well as very high-end brands Schrader, Sea Smoke and Lingua Franca.
The Robert Mondavi Winery brand and its flagship winery in Napa Valley also stay, for now, with Constellation. Lower-end brands Robert Mondavi Private Selection and Woodbridge, which was once called Woodbridge by Robert Mondavi, go to The Wine Group. That's going to be complicated for distributors to explain.
Constellation also announced this week that it is dropping some of its DEI program after being pressured by conservative activist Robby Starbuck; this is an ongoing trend in corporate America. The company says it will stop using the term "Latinx", will stop its Focus on Female Founders and Focus on Minority Founders programs, and will rename its DEI team "the Inclusive Culture team".
Constellation's stock had dropped nearly 30 percent in the past three months before the Wine Group deal. Yesterday its stock shot up more than 7 percent as part of the general investor euphoria over a pause in Trump's tariffs, which were (and still are) expected to have a big negative impact on the wine and spirits business.
For the future of both the rest of Constellation's wine portfolio and the trade war, we'll just have to wait and see.

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