Constellation Brands selling Svedka vodka to Sazerac

Dive Brief:

• Constellation Brands will sell its Svedka vodka brand to Sazerac, the maker of Fireball and Southern Comfort. Financial details were not disclosed, but the deal is expected to be finalized in the coming months. 
• The Corona brewer said the decision follows the divestiture in recent years of most of its popular wine and spirits brands as it focuses on higher-end wine and craft spirits.
• Facing a decline in alcohol consumption, spirits makers are choosing to sell some of their lower-priced offerings while holding on to faster-growing premium brands.

Dive Insight:

Constellation Brands CEO Bill Newlands said the sale reflects the company’s evolving approach to spirits.

“This transaction is another step forward in seeking to ensure that our wine and spirits portfolio is optimized to succeed and to meet our growth objectives,” Newlands said.

For Sazerac, the Svedka purchase gives the Louisiana-based company another offering to add to its portfolio of more than 500 brands as it boosts its market share in spirits. It follows the company’s additions of RTD cocktail maker BuzzBallz earlier this year, and whisky makers Athrú and Hazelwood Demense in 2022.

While still the top-selling spirit in the U.S., vodka sales declined 2% in 2023, according to figures from Impact Databank cited by Market Watch, as tequila and ready-to-drink cocktails grew in prominence.

In 2022, Svedka was the fourth best-selling vodka brand by sales volume in the U.S., behind Tito’s, Smirnoff and New Amsterdam, VinePair reported.

Other alcohol producers are focusing their efforts on growing their premium portfolios. Molson Coors is “aggressively” pursuing higher-end spirits, CEO Gavin Hattersley told investors last year. This came after the beverage giant posted volume declines in its lucrative beer business. Guinness maker Diageo is also leaning into premium spirits after debuting a new business division focused on its more expensive brands last month.

Constellation also has taken steps to grow its presence in the luxury wine category, purchasing Santa Barbara winery Sea Smoke for an undisclosed amount this spring and acquiring Ayesha Curry’s premium Napa Valley brand Domaine Curry in 2023.