## In 2004, Constellation had the fastest 

response to Covey Run has driven its sales up 26 percent. Since its acquisition in 2001, Blackstone has emerged as America’s favorite restaurant merlot priced at $30 and under, and sales have tripled to 1.2 million cases. Along with Ravenswood, Simi and Estancia, Blackstone is an excellent example of Constellation Wines’ organic growth through acquisitions. 

In the popular wine segment, sales of Almaden wines are approaching ten million cases annually. Almaden has taken the box wine category in an exciting new direction with both Red and White Sangria debuting in innovative box packaging featuring bright, festive graphics. 

Capitalizing on the success of Arbor Mist wines with fruit, Constellation Wines successfully launched Arbor Mist Wine Blenders – the first premixed blender beverage made with wine. Available in strawberry, blackberry and peach, Arbor Mist Blenders’ success made an impactful contribution to overall brand growth in excess of 10% in 2004. 

## AUSTRALIAN WINE: AN AMERICAN SUCCESS STORY 

The continuing demand for Australian wines in the United States presents an exciting opportunity for Constellation Wines. Banrock Station’s rich, full- flavored Australian wines are making a strong impression on American premium wine consumers. Within nine months of Banrock Station’s inter- national launch, its White Shiraz sold more than 60,000 cases. Alice White’s 

bold, fruit-driven wines, with 27 percent growth, is one of the fastest-growing Australian wine brands in the U.S. 

With consumer-friendly labeling and distinguishing varietal flavor, Australian wines are expected to continue to appeal to American wine consumers. With 20 vine- yards in Australia, and a strong American distribution network, Constellation Wines can offer consumers variety and quality in a range of price points. 

## THE U.K. AND EUROPEAN MARKETS 

The increasing demand for Australian wines is not restricted to the U.S. With a quarter share of the U.K. wine market, Australia has surpassed France as the dominant wine supplier in the United Kingdom. An added opportunity for Constellation Wines is that California wines have overtaken Italian wines to become the U.K.’s third largest wine source. With production and marketing strengths in both Australian and Californian wines, Constellation Wines is capturing an increasing number of retail outlets as a supplier of choice. 

Constellation Wines dominates the U.K. branded wine market with strong sales of Hardys Stamp, Banrock Station, Hardys VR and Stowells, and we expect our position in this key market to grow significantly. 

As California wines such as Echo Falls, sold exclusively in the U.K., earn continuing acceptance, Constellation Wines’ market share for U.S. wine in the U.K. should strengthen appreciably. Echo Falls’ 2003 introduction was one of the most successful wine launches in British history. 

Constellation Wines also has a strong New Zealand presence in the U.K. The Nobilo brand has experienced a 30 per- cent rise in U.K. sales, driven primarily by the very popular Nobilo Sauvignon Blanc. 

An integral part of the continuing success of Constellation Wines’ New World Wine portfolio in the U.K. is Constellation’s wholesale business Matthew Clark, which provides distribution to the on-premise U.K. wine market. This plat- form will continue to propel market share gains for Constellation Wines as well as increase its already strong standing and market share as a wholesaler. 

Outstanding opportunities also abound in mainland Europe. A quarter century ago, New World Wines represented one-fourth of one percent of total imported wine sales. Today, it’s approximately 25 percent. Here, and elsewhere outside our core markets, we will continue to build our presence by delivering strong routes-to-market within countries with the best opportunities for New World Wines. We have focused our resources on a number of these targeted markets for the new fiscal year and beyond. 

## A VISION OF GROWTH 

Today, with operating companies in the United States, England, Europe, Asia, Australia and New Zealand to serve our customers, and over 50 vineyards produc- ing numerous award-winning wines, Constellation Wines has built a position of global strength with an outstanding portfolio of brands. With a broad New World Wine portfolio and strong global routes-to-market, Constellation Wines has the magnitude of brands to continue to deliver wines to suit growing consumer demand for variety and quality, and generate profitable growth. 

