Female Millennial Media Opps: Constellation Brands increasing wine & spirits portfolio ad spend in H2, focusing on D2C channel (Score 62)

H2 Marketing Spend Increases: In their recent Q2 2021 (June - August) earnings call, Constellation Brands, Inc. (CB) execs mentioned that although marketing spend was "significantly muted as a percentage of sales" during the first half of the year due to the pandemic, the company plans to shift marketing dollars into H2 to support "power brands and innovation launches." Note that CB's fiscal year ends in February, so their H2 runs from September through February (during their peak selling season: the holidays). Specifically, H1 marketing spend was 8.6% of net sales; this should jump to 10-11% during H2. Per its most recent 10-K, CB's wine & spirits marketing spend decreased by $17.8 million during the first half of the year.

D2C Channel Focus: CEO Bill Newlands also mentioned that CB is renewing its focus on the D2C space to become a key driver of sales; Ryan Mason joined CB this month as director of D2C growth to expand this channel. This includes redeploying marketing dollars to support digital commerce channels following its July acquisition of D2C wine brand Empathy. Empathy co-founder & former CEO Jon Troutman now serves as CB's VP of D2C marketing (since the acquisition), so be sure you are reaching out to procure potential revenue in this channel as he sets the marketing strategy.

Sellers should look for opportunity in the states where direct shipment of wine to consumers is permitted by law (sales are NOT permitted in: Utah, Arkansas, Mississippi, Alabama, Kentucky, Delaware, Rhode Island, New Hampshire, Connecticut, West Virginia & certain zip codes in Florida). CB also invested in another D2C wine business, Booker Vineyard, earlier this year (April 2020).

Canopy Growing Investment Increase: In May, CB increased its investment in Canopy Growing, bringing its stake in the cannabis beverage company to 38.6% from 9.9% in 2017. Canopy has plans to bring its beverages to the US market in 2021, starting initial roll outs in Illinois & California. The brand will first appear in dispensaries, but wants to get into liquor stores & other retail locations once legally possible. Canopy CEO David Klein sees Canopy & other cannabis beverages as the same type of disruptor in the alcohol market that hard seltzers have been for the last year. While there may not be an immediate opportunity here, keep this brand on your radar for 2021 revenue and beyond. 

CB Marketing Spend: Read more about CB's brand level spend here, provided by Pathmatics, iSpot. A few things to note about CB's media spend:

• Most of CB's brands have shifted away more money into direct digital buying in 2020; majority of this spend is going to social media sites such as Instagram, Facebook & Twitter.
• CB's Wine & Spirits portfolio marketing tends to target women, particularly those aged 30+.

Upcoming Product Launches: Execs also mentioned key product launches in the Q2 call, which will be "supported through the remainder of the year with impactful marketing campaigns to strengthen & build the portfolio." These include: Prisoner Cabernet Sauvignon & Chardonnay varietals, SVEDKA & High West ready-to-drink cocktails, Ruffino wine spritzer & Meiomi Cabernet Sauvignon.

2020 Divestments: CB sold its Ballast Point brand earlier this year, which was part of a larger effort to "fully compete in growing sectors of the high-end segment of the US beer market." New Zealand-based Nobilo Wine is also being sold, a transaction that should close by the end of CB's fiscal 2021. As CB refines its portfolio, it will be able to drive increased focus to high-performing and high-growth brands. 

Sponsorship: CB recently entered into a partnership with WWE SummerSlam, which made Victoria the official beer of SummerSlam. The deal with Victoria includes match sponsorship within the event, segment sponsorship of the SummerSlam Kickoff Show, partnerships with WWE brand ambassadors, social media, retail activations & other cross-channel campaigns. Corona & Modelo are also figure into the deal, but specifics of their involvement in the partnership were not released at the time of this article's publication. 

CB also recently signed a number of NFL partnerships, including Allegiant Stadium (Las Vegas) & SoFi Stadium (Inglewood, Calif.).

Agency & Martech Readers: The shift to D2C focus could open up work in those channel next year, so be on the lookout for possible reviews. Additionally, product launches could bring project-based work & Canopy's US expansion should do the same. I wouldn't expect a review to begin before the end of the year; instead, look slightly further out to Q2-3 2021 (April - July) should roster reviews occur.

CB's current agency roster includes:

• Horizon Media (media buying & planning AOR since 2010)
• Cavalry (creative for Woodbridge, Robert Mondavi, Meiomi, Kim Crawfordsince 2018)
• R/GA (creative for SVEDKA since 2018)