Constellation pours $100M into female-led alcohol brands
- Constellation Brands announced it will invest $100 million in female-founded alcoholic beverage companies by 2028 to boost support for women in a predominantly male industry, according to a release. The new program — called Focus on Female Founders — will be run by the company's corporate venture capital arm Constellation Brands Ventures.
- The company also named its first two investments in beverage companies: Austin Cocktails, which makes bottled craft cocktails, and Vivify Beverages, which makes hard sodas.
- "Women are an underrepresented demographic in the beverage alcohol industry and we are committed to doing our part to help change this," Bill Newlands, Constellation's current president and chief operating officer and the incoming chief executive officer, said in a release.
In a male-dominated alcohol industry, this could be a big step in turning the tide. As of now, the beverage and tobacco manufacturing industry is composed of about 80% male executives, according to the Equal Employment Opportunity Commission's most recent data. And the women that do run their own businesses get significantly less capital funding than men. Last year, just 2.2% of venture capital funding went to female-founded businesses, according to data from Pitchbook.
Constellation's $100 million investment in female-founded alcoholic beverage companies during the next 10 years could start to make a difference in opening up opportunities for women to get involved and grow their companies. Along with the investment, the alcohol giant will also give the startups access to its supply chain, distributors and brand-building resources. That could help expand each brand's reach and help women-led alcohol businesses become more well known across the country.
Women-led businesses are one of the fastest growing entrepreneurship segments, according to the U.S. Small Business Administration. These businesses also generate twice as much revenue per dollar compared to other businesses. According to a 2018 American Express report, U.S. women-led businesses have increased by 58% since 2007, and revenue from these companies increased 46% in that time period.
Newlands, who will officially take the helm of Constellation in March, could be looking to take advantage of a market that has been largely untapped by big beverage giants.
"As consumer demographics, needs and choices continue to evolve, we believe the focus and point of view that women-led businesses bring to the table will help drive transformative innovation and accelerated growth for our business and, more importantly, for the beverage alcohol space at-large," he said in the release.
Although no other alcohol giant has committed to investing this much in female-founded beverage businesses, other brands have recently marketed more products to women. Last year, AB InBev relaunched Lime-A-Rita to market it exclusively to women. The brand was rebranded with the slogan "for women, by women," and the entire team of brewers, marketers and partners behind it were all female. Additionally, Johnnie Walker debuted a female logo to make scotch less "intimidating for women" and other alcohol manufacturers have introduced drinks with fewer calories to attract millennials and especially women. Constellation's approach of investing in already established women-led businesses could prove to be more effective in gaining the trust of female consumers.
Investing in startups through a venture capital firm has also become a bigger trend in recent years. Constellation has been one of the major beverage companies investing in emerging brands. And the company has made room for new investments by trimming its portfolio. Earlier this year the company announced plans to sell its wine brands.
The alcohol space is frequently changing to meet new consumer demands. This move to invest in women-led brands could help Constellation stay on top of those shifting needs. Studies have shown that millennials don't have strong loyalty to alcohol brands, leading them to look to new beverages and innovations. With non-brand-loyal millennials willing to try different products in an underrepresented industry for women, Constellation could gain a lot from these women-founded smaller beverage brands that just need help reaching a broader market.
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