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Constellation Brands' CEO Discusses Q4 2012 Results - Earnings Call Transcript

We became more unified and integrated as one company by advancing our fusion technology initiative, and we are currently implementing a shared service infrastructure. Collectively, these initiatives are designed to create an integrated technology platform and enhance the processes that support our business.

We expanded our international presence by establishing an office in Hong Kong, and we are currently in the process of exploring next steps for our emerging market participation strategy.

Fiscal 2012 marked our highest level of brand building activity in recent history, which is paying off in the marketplace. A few examples include SVEDKA. We introduced new packaging configurations and flavor profiles, which helped the brand to surpass Gray Goose in volume sales, making it the second largest imported vodka brand in the U.S. today.

We launched more than 25 new products in fiscal 2012, including the introduction of 4 new wine brands in fast-growing categories. They include Simply Naked, Primal Roots, Rioja Vega and The Dreaming Tree.

In the U.S. beer market, Crown continued its launch of Victoria, which posted significant growth and was awarded the Leader's Choice Award as the Best New Product by Market Watch magazine. Victoria has also become the #1 new beer in terms of dollar sales in the SymphonyIRI food, drug, mass and convenience channels.

In response to the need of consumers looking for additional ways to enjoy products, Crown also expanded its draft beer offerings, which resulted in depletion growth of almost 60% for this format and increased brand recognition for the Modelo Especial, Negra Modelo, Pacifico and Victoria brands.

We have recently launched the next phase of our U.S. distributor consolidation efforts in markets where it makes sense. The signing of multi-year agreements with additional U.S. distributors covering almost 10% of our U.S. wine and spirits volume will give them the right to sell Constellation's portfolio of wine and/or spirits exclusively in their respective markets.

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