Constellation Doubles Down on ‘Beer’

Constellation Brands (NYSE: STZ) announced two significant moves yesterday to bolster focus on its beer portfolio, which includes hard seltzer brands. Jim Sabia and Mallika Monteiro, key players in the hard seltzer expansion at Constellation, will lead the company in its focused 2021 strategies.

Jim Sabia to Direct Beer Division

The company created a new position, Executive Vice President and Managing Director, Beer Division, which includes hard seltzer, and installed Jim Sabia. Sabia is moving from the role of Chief Marketing Officer for the company, a job that included marketing oversight for all the company’s categories. Constellation’s portfolios include beer, hard seltzer, wine, and spirits.

Sabia is a 14-year veteran with Constellation, having started in the spirits division as VP of Marketing. In a short two years, he was named Chief Marketing Officer of Beer and then in 2018 was named CMO for all divisions. He is credited for revitalizing the company’s wine and sprits business and overseeing all new product launches, including hard seltzer.

The move is significant in giving such an important player oversight of the Beer Division, at a time when Corona Hard Seltzer is growing rapidly and seeking to take share from the top three of White Claw, Truly, and Anheuser-Busch’s Bud Light hard seltzer. Not only is Constellation creating a new position, and giving the reins to rockstar Sabia, but is also leaving his old role vacant for the time being. The Chief Marketing Officer role is typically seen as highly influential at a consumer packaged goods corporation.

Mallika Monteiro Gets Another Promotion

Also in the February 23 news release, Constellation named fast-tracker Mallika Monteiro to the slot of Executive Vice President and Chief Growth, Strategy and Digital Officer. Monteiro has been with the company less than five years, joining as VP of Beer Innovation, a division that led to the creation of Corona Hard Seltzer.

Since joining the company in 2016, Monteiro has quickly bubbled up to roles of increasing responsibility, “across consumer and category insights, innovation and new product development across beer, wine and spirits, as well as leading the company’s strategy development and business transformation functions.” Her background includes stints at A-B and Beam, while receiving her MBA from Harvard.

Monteiro was also a leader in the establishment of Constellation’s Focus on Female Founders program, which invests in female-founded or female-owned start-ups in the beverage alcohol category. Initial investments were made in companies like Austin Beverages and Vivify Beverages, makers of Itz Spritz and Bravazzi hard seltzer.

“We must be agile to stay ahead of shifting consumer behavior,” Monteiro said in the release. “This requires us to continue building an organization with best-in-class capabilities to anticipate, meet and engage with consumers where they’re headed, whether that’s in digital channels or by exploring disruptive brands in emerging categories. I’m excited to work with our teams to drive our big ambitions in these areas.”

Lawsuit over Beer vs Hard Seltzer

Constellation stock price has been under pressure since news broke on February 15 lawsuit filing by A-B over the use of the Corona brand in association with hard seltzer. Anheuser-Busch contends that it never intended for Constellation to develop a powerhouse competitive brand of hard seltzer under that moniker, when signing over the US rights in 2013.

At the crux of the suit is legal definition of hard seltzer, with the judge expected to be in a position to cast opinion over whether, for the sake of marketing and distribution, hard seltzer is considered beer — or its own category. With all major craft beer and big beer producers now making hard seltzer, its seen as an uphill battle for Anheuser-Busch, who produces its own eponymous brand extensions in Bud Light Hard Seltzer and Michelob ULTRA hard seltzer. If that case takes an unexpected turn and strips Constellation of US rights for Corona Hard Seltzer, it would surely be challenged in appeal.

The promotions announced yesterday by Constellation signal its commitment to the broader category and strategic positioning to gain market share in 2021.