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Constellation Brands taps Tastemade to help draw new customers

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Constellation Brands is pouring into the streaming business.

The company, which owns beer, wine and spirits brands, is forming a partnership with media company Tastemade to create a content studio and produce shows that revolve around Constellation’s brands. The companies called it a “multimillion-dollar, multiyear partnership,” but declined to give specific terms.

It builds on a partnership formed between Tastemade and Constellation in recent years when the two collaborated on videos for social media in an effort to attract Generation Z and millennial consumers of drinking age. This is the first time Tastemade has partnered with another company to create a studio. The majority of operations will take place at Tastemade’s headquarters in Santa Monica, California.

Tastemade creates and produces content that centers on food, travel and home and design for its own free, ad-supported streaming channels and social media. It also produces and licenses content to other streaming services, including those owned by Warner Bros. Discovery and Walt Disney Co.

Its partnership with Constellation will take a similar form.

“We have more ideas that Tastemade-owned channels can take at the moment, so we’re developing ideas that we can bring to streamers,” said Tastemade founder and CEO Larry Fitzgibbon. “We’ve already developed a slate of programs and shows, and have started the process of talking to some of the streamers. We’ve gotten pretty good reactions so far.”

The first program will be “Street Somm,” which will be an on-the-go travel series that follows a sommelier to cities throughout the U.S. to explore food and wine pairings. It will air on Tastemade’s flagship streaming channel.

“What was exciting about this partnership is we just got kind of unprecedented access to some story hunting within Constellation Brands,” said Fitzgibbon.

Constellation’s leading brands include Corona, Modelo Especial, The Prisoner Wine Company, Kim Crawford, Svedka Vodka and others.

Constellation Brands product line.

Adam Jeffery | CNBC

The partnership comes as Constellation looks to attract younger consumers, especially for its wine business.

“The wine category is not growing very robustly in large part because the wine industry hasn’t done a particularly good job at engaging younger, multicultural consumers,” said Robert Hanson, executive vice president at Constellation.

For the three months ended in November, Constellation’s net wine sales decreased 7% year over year from $506.2 million to $470.5 million.

Following a 2019 divestment of dozens of lower premium brands, mostly wines that cost under $11 a bottle, Constellation has been reshaping its portfolio to focus more on ultra-premium fine wine and craft spirits. The only caveat with this transition, according to Hanson, is younger consumers may not be as familiar with the higher-end brands.

“This partnership enables us to engage younger consumers in ways that they expect to be engaged in today,” said Hanson, who serves as president of the company’s wine and spirits division.

He hopes that through the partnership the brands will broaden their appeal with “culturally relevant,” “farm-to-bottle” stories and perhaps even go “viral.”

Fitzgibbon said viewers of the Tastemade cooking shows often search for the products that are featured.

“A meaningful percentage, like more than half of the consumers who watch us on streaming, seek out additional information,” he said.

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