Constellation Brands, the New York-based owner of California’s Robert Mondavi Winery, has issued a concerning outlook for the wine industry, citing “continued category pressures.”
With CEO Bill Newlands stepping down, the company anticipates a decline in the fine wine market. Chief Financial Officer Garth Hankinson pointed to various factors affecting margins for the fourth quarter ending February 28, including “continued category pressures, channel headwinds, timing of leverage costs, and rebalancing of distributor inventory.”
During an April 7 conference call, Hankinson noted, “U.S. fine wine has shifted from expected low-single-digit growth to a low-single-digit decline. Similarly, U.S. fine spirits have dropped from positive mid-single-digit growth to flat or slight decline.” He added that while the company is doing better than the market, it remains on a lower base.
Newlands, who had been with Constellation since 2019, resigned on April 13, passing the CEO role to board member Nick Fink. Fink expressed a desire to “further strengthen the company’s core strengths.”
Despite challenges, Newlands mentioned that the company ended the 2026 financial year with “solid momentum” in the beer sector, even considering a “challenging economic backdrop with more selective purchasing behavior.” Fink reassured stakeholders that the company enters its next phase “from a position of strength,” bolstered by a solid beer portfolio and a redesigned wine offering.
Robert Mondavi Winery, located in Oakville, California, is set to reopen on April 20 following renovations. The winery plans to offer a “Pioneer Tasting” course for $60. However, Hankinson mentioned that the Napa tasting room has also been struggling, remarking on a general softness at Napa-based wineries.
Many local wineries face similar difficulties, with some owners opting to sell to larger corporations or shutting down altogether. The loss of the boomer generation, a key demographic for wine consumption, has contributed to the industry’s economic troubles.
