Diageo Brings Spanish Wines to US - Analyst Blog


Americans can now savor their favorite Spanish wines as Diageo Plc.'s ( DEO ) s ubsidiary Diageo Chateau & Estate Wine (DC&E) has gained the exclusive rights to import two popular Spanish drinks - Campo Eliseo and Campo Alegre - from the Toro collections of Spain beginning Sep 1, 2013. These additions will augment Diageo's already rich luxury import collection.  

DC&E manufactures and markets premium wines from vineyards around the world, including Napa Valley, Sonoma, the California Central Coast, Argentina, France, Italy, New Zealand and Australia. It also imports Bordeaux and Burgundy estate-bottled wines.

With these two wines DC&E stepped into the booming Spanish wine sector. Campo Eliseo and Campo Alegre have been crafted by the famous winemaker Michel Rolland, his wife, Dany, and the iconic Bordeaux-based wine maker, Francois Lurton. The wines, famous for their strong taste and longevity, are made from 100% Tinta De Toro grapes, grown in Toro, central Spain.

While Campo Eliseo is brewed from grapes growing in 50 to 75 year old vines, Campo Alegre is made from younger vines. Campo Alegre has a milder taste and is priced at $40 per bottle. Campo Eliseo, on the other hand, is priced at about $80 per bottle. Diageo will offer the new varieties in the markets of New York, Florida, Washington, DC, Texas and California. 

Management feels that the global luxury market, especially the luxury alcohol category, is expected to reach approximately $400 billion within the next few years. Moreover, the growing affluence of the emerging middle-class consumers has prompted Diageo to ensure easy availability of spirits through flavor extensions, new packaging and drink formats.

Other Stocks to Consider

Diageo currently holds a Zacks Rank #3 (Hold). Other consumer staple stocks worth considering are Boston Beer Co. Inc. ( SAM ), Constellation Brands Inc. ( STZ ) and Green Mountain Coffee Roasters Inc . ( GMCR ). While Boston Beer and Green Mountain carry a Zacks Rank #1 (Strong Buy), Constellation Brand carries a Zacks Rank #2 (Buy).

DIAGEO PLC-ADR (DEO): Free Stock Analysis Report

GREEN MTN COFFE (GMCR): Free Stock Analysis Report

BOSTON BEER INC (SAM): Free Stock Analysis Report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: DEO , GMCR , SAM , STZ

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