Constellation Brands marks 70 years, eyes future

When legacies are discussed, the Rochester conversation gravitates to the likes of Strong and Eastman. That is by no means a complete list. Nor is it one that is closed.

Continuing along the path forged by his father, Rob Sands now finds himself and Constellation Brands stepping onto that elite stage.

The company that began in an old sauerkraut plant in Canandaigua is today a diverse, $28 billion enterprise that overshadows big names like Kodak, Xerox and Paychex in sheer size. Now based in Victor, Constellation spans 100 brands and 125 countries, employs 7,700 worldwide (more than 700 locally) and weighs in as the third-largest beer company and largest multi-category beverage alcohol company in the United States. Sales topped $6 billion in fiscal 2015.

"It gratifies us that we are in a position to do the kind of things a George Eastman did in Rochester 100 years ago … to really be able to make a statement in the community," said Sands, the company's CEO and president.

Constellation celebrates 70 years in business this month, fresh off a headline-grabbing $1 billion deal to buy Ballast Point — the largest-ever acquisition of a craft brewer. Giving by Constellation and the Sands Family Foundation, meanwhile, has totaled $2.68 million over the past year, most of that going to this region, according to the company's 2015 Corporate Social Responsibility Report.

The company has focused its giving in areas of education, health and the arts. To mark its 70th anniversary, Constellation is donating $70,000 to the New York Wine & Culinary Center. The gift will help the nonprofit offer more classes and certifications in beer and cider — which is fitting, as Constellation is a company built on wine that today is making its biggest deals and seeing its largest growth in beer.

The center was conceived by brothers Richard and Rob Sands, having seen similar endeavors in other wine regions. The purpose is to promote the state's beverage, agriculture, and culinary industries. Wegmans and Rochester Institute of Technology signed on as partners, and the center opened in 2006. Where others since have failed, the center has flourished.

Having Constellation as a partner and in your backyard, "It gives us instant credibility," said John Berndt, the center's general manager. "It gets us an introduction with anybody and everybody."

Sands reflected on his father's philanthropic focus when announced as the newly elected chairman of the Greater Rochester Chamber of Commerce. The son called it "corporate responsibility."

"And it's not entirely philanthropic," he said, noting that investments that are good for residents and families create a positive culture inside the company and "a good environment to do business."

The Sands' and Constellation's philanthropy has been wide and deep, from the Constellation Brands-Marvin Sands Performing Arts Center in Canandaigua, to the Sands-Constellation Heart Institute at Rochester General, and the Sands Family-Constellation Building at the Monroe County Pediatrics and Visitation Center. Other causes have included the Rochester Philharmonic Orchestra, University of Rochester, F.F. Thompson Hospital, RIT and Rochester City Ballet.

"That's really what we're looking at (in) the future, is how we are making a difference," Sands said.

That, and sustained growth.

The Ballast Point purchase follows the 2013 "Deal of Deals" for Constellation, a nearly $5 billion acquisition that gave the company control of the popular Modelo portfolio (also including the Corona and Pacifico brands) in the U.S., a new brewery and all brewing profits in Mexico. Those are the big growth drivers in the company, and the company is investing billions in an expanded and a new brewery to ensure it has the capacity to meet demand. But there also need to be backups, and Ballast Point is fast growing in its own right.

Looked at another way, the beer business is flat, and domestics are in decline. Imports and craft brews are growing, Sands said.

He has led the company since 2007, taking the reins from his brother, Richard, and the patriarch Marvin Sands before him. Under his leadership, the company has reorganized from a global company with $5.2 billion in sales, a large percentage outside the United States, to a company focused in the U.S. and Canada. Once dominated by lower-margin and low-profit wines, they shed much of that business and saw total sales dip to $3.7 billion in fiscal year 2008. Today they are the largest premium wine company in the world and, with the Modelo deal, have seen sales rebound and surpass prior totals.

"We have more than doubled our profitability as a company," he said. "Are we done (with the reorganization)? We're never done. But is that transformation complete? Yes."

The reorganization also centralized what was a dispersed literal constellation of operations into one company. Ballast Point will be an anomaly, and continue to operate in many respects as a stand-alone. Said Sands: "We don't want to overwhelm it, or take the chance of impeding its growth. We didn't buy it for the synergies." He likens the acquisition to Constellation "putting our foot, putting our toe in the water" of the craft industry.

Constellation remains open to other acquisitions, he said. Asked about the $10.3 billion Anheuser-Busch InBev/SABMiller deal, and brands that will be spun off in that deal, Sands said there were "none we are going to be interested in." The company, meanwhile, also remains committed to the Finger Lakes region, despite substantial corporate offices in San Francisco, Chicago and San Antonio, Texas.

"What keeps us here?" Sands asked. "A lot of it is historical. This is where the company was founded. Therefore, this is where a lot of people who work in the company … where their roots are."

Rob Sands isn't retiring anytime soon but asked about succession, he said: "We don't have anybody in line, necessarily. But we don't see that as problematic. … I believe we have a very strong bench of talent."

Robert Duffy, the chamber's president and CEO, called Constellation "a great source of pride for Rochester, for this region." The former New York state lieutenant governor and Rochester mayor notes the "culture of giving back" in the same breath as the number of employees. "Constellation and Wegmans, they are the pinnacle, they define success no matter where you go around the world, around the country."

BDSHARP@Gannett.com

Looking back

• 1945: Marvin Sands buys Canandaigua Industries.
• 1951: Company posts $1 million in sales.
• 1954: Richard’s Wild Irish Rose debuts, named after Richard Sands.
• 1961: Gross sales reach $8 million.
• 1973: Name changed to Canandaigua Wine Co., Inc. Stock sells over the counter on NASDAQ.
• 1974: Gains a California base with a majority interest purchase of Bisceglia Brothers Wine Co. 
• 1980: Becomes the eighth-largest domestic wine producer with net sales of more than $50 million.
• 1983: Begins trading on the American Stock Exchange.
• 1985: Recently launched Sun Country Wine Coolers becomes the No. 2 best-selling cooler.
• 1990: The company markets 100 brands in all wine classifications.
• 1991: California’s Guild Wineries and Distilleries purchased.
• 1993: Company doubles in size with acquisition of imported beer and spirits company, Barton Inc.
• 1994: Acquires Almaden and Inglenook wine brands.
• 1997: Net sales top $1 billion. Company becomes Canandaigua Brands Inc. 
• 1998: Arbor Mist and new Wine with Fruit category introduced. First international acquisition, Matthew Clark, completed.
• 1999: Acquires Franciscan Estates and SIMI Winery. Eight Canadian brands purchased from Diageo, including Black Velvet. Begins trading on NYSE.
• 2000: Company name changes to Constellation Brands Inc. 
• 2001: Ravenswood Winery acquired. Pacific Wine Partners joint venture begins with BRL Hardy. Several wines acquired from Turner Road Vintners.
• 2003: BRL Hardy fully acquired, making Constellation the largest wine company in the world.
• 2004: The Robert Mondavi Corp. is acquired, along with a 50 percent interest in Opus One Winery.
• 2005: Constellation joins the S&P 500 and hits gross sales of $5 billion.
• 2006: Completes acquisition of Canadian wine company, Vincor International.
• 2007: Acquisitions include producer of SVEDKA Vodka, Spirits Marque One and Beam Wine Estates.
• 2008: Begins move toward premium wines. Divests Almaden and Inglenook value brands and Paul Masson winery. 
• 2009: Sold value spirits business.
• 2011: Announces commitment to expand into Asia. Completes sale of Australia and Europe businesses.
• 2012: Fully acquires Italian wine brand, Ruffino.
• 2013: Acquires Grupo Modelo’s U.S. beer business, as well as world-class brewery in Nava, Mexico from AB-InBev.
• 2014: Acquires Mexican glass plant, Industria Vidriera de Coahuila. Creates joint venture with Owens-Illinois to operate the plant. Acquires Casa Noble tequila. 
• 2015: Acquires San Diego-based craft beer company, Ballast Point. Net sales reach more than $6 billion.