Constellation Brands, the parent company of Napa Valley’s Robert Mondavi Winery, has announced a more challenging outlook for its wine and spirits sector despite ongoing success in its beer division. The company reported these findings during its fourth-quarter earnings release for fiscal 2026.

As part of its strategic shift, Constellation has been focusing on higher-priced wine brands like Mondavi, Schrader Cellars, and The Prisoner Wine Co., after divesting lower-priced labels such as Simi from Healdsburg last year. Nevertheless, the wine and spirits division is still grappling with weakened consumer demand and various industry challenges.

Chief Financial Officer Garth Hankinson highlighted several factors negatively impacting profit margins, including ongoing pressures within the category, challenges in distribution channels, and a need to rebalance distributor inventory. He noted that the anticipated growth in high-end U.S. wine has shifted to a scenario of slight declines, while high-end spirits have slowed from moderate growth to stagnant figures.

Additionally, the company has seen a decline in both winery visitations and international demand, specifically citing challenges in Canada, its largest market, where a ban on U.S. wines and spirits is still in effect.

In a recent report, Constellation recorded a net sales figure of $9.14 billion, reflecting a 10% decrease overall and a 4% decline for the remaining portfolio. The wine and spirits segment now represents only 9% of total revenue after various sales, and shipments in this area plummeted by 62% year-over-year.

The landmark Robert Mondavi Winery in Oakville is set to reopen on April 20 following a significant renovation. A temporary tasting room was operational in downtown Napa during this time.

Despite these challenges, Constellation’s beer segment remains strong, particularly its Mexican beer brands. The company aims to adjust inventory levels with distributors to navigate the current slower sales environment and anticipates eventually returning to profitability, although it may take longer than expected due to existing market headwinds.

In contrast, Constellation’s beer division continues to thrive, showcasing solid momentum even amidst a tough economic backdrop, largely due to the success of popular brands like Modelo Especial, which holds the title of the top beer brand in the U.S. by dollar sales.

For more information on Constellation Brands and its operations, visit Constellation Brands.