Item 1. Business

Introduction

We are an international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy with powerful, consumer-connected, high-quality brands like Corona Extra, Modelo Especial, Robert Mondavi, Kim Crawford, Meiomi, and SVEDKA Vodka. In the U.S., we are one of the top growth contributors at retail among beverage alcohol suppliers. We are the third-largest beer company and a leader in the high-end of the U.S. beer market and a higher-end wine and spirits company with many of our products as leaders in their respective categories. Our strong market positions make us a supplier of choice to many of our consumers and our customers, who include wholesale distributors, retailers, and on-premise locations. We conduct our business through entities we wholly own as well as through a variety of joint ventures and other entities.

Our mission is to build brands that people love. We are in the business of creating new experiences that bring people together and elevate their lives. It’s worth our dedication, hard work, and the bold calculated risks we take to deliver more for our employees, consumers, trade partners, shareholders, and communities in which we live and work. It’s what has made us one of the fastest-growing large CPG companies in the U.S. at retail, and it drives our pursuit to deliver what’s next. Our key values are:

People – True strength is achieved when everyone has a voice. That is why we build our culture on a foundation that encourages inclusion and diversity of thought, where everyone feels empowered to bring their true selves and different points of views to drive us forward;

Customers – We are relentless to anticipate what consumers want today, tomorrow, and well into the future;

Entrepreneurship – As an industry leader, we act with a bold calculated approach to realize our vision and unlock new growth opportunities;

Quality – Our promise is to pursue quality in our process and products by continuously enhancing what we do and how we do it; and

Integrity – It is about more than achieving goals. How we achieve them is just as important. We act with high moral and ethical standards and always do the right thing, even when it is the hard thing.

Headquartered in Victor, New York, we are a Delaware corporation incorporated in 1972, as the successor to a business founded in 1945.

Strategy

Our overall strategy is to drive growth and shape the future of our industry by building brands that people love and delivering unrivaled value to our shareholders. We endeavor to position our portfolio to benefit from the consumer-led premiumization trend, which we believe will continue to drive faster growth rates in the higher-end of the beer, wine, and spirits categories.

To capitalize on consumer-led premiumization trends, become more competitive, and grow our business, we have employed a strategy dedicated to a combination of organic growth and acquisitions, with a focus on the higher-margin, higher-growth categories of the beverage alcohol industry. Key elements of our strategy include:

• leverage our leading position in total beverage alcohol and scale with wholesalers and retailers to expand distribution of our product portfolio;

• strengthen relationships with wholesalers and retailers by providing consumer and beverage alcohol insights;

• invest in brand building and innovation activities;

• position ourselves for success with consumer-led products that identify, meet, and stay ahead of evolving consumer trends and market dynamics;

• realize operating efficiencies by expanding and enhancing production capabilities and maximizing asset utilization; and

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• develop employees to enhance performance in the marketplace.

We have remained committed to executing this strategy, and as a result have realized its impact on each segment of our business.

In our beer business, we have solidified our position in the high-end of the U.S. beer market; enhanced our margins, results of operations, and operating cash flow; and provided new avenues for growth. We made capital investments to increase beer production capacity to support the growth of the business. We continue to focus on consumer-led innovation by creating new products that meet emerging needs.

In our wine and spirits business, we continue to focus on higher-end brands, improve margins, and create operating efficiencies. We continue to drive our strategy by acquiring higher-margin, higher-growth wine and spirits brands, including the addition of Meiomi and Prisoner to the portfolio we refined over the past several years. We have strategically optimized the value of this business through the recent divestitures of a portion of our wine and spirits business, which included lower-margin, lower-growth brands, wineries, vineyards, offices, and facilities. Higher-end spirits brands were added to our spirits portfolio through the acquisitions of Casa Noble tequila, and High West craft whiskeys, and we recently introduced SVEDKA and High West pre-mixed cocktails to capitalize on the growth in the ready-to-drink space. In addition, we have strengthened our position in the accelerating direct-to-consumer and 3-tier eCommerce channel with the acquisition of Empathy Wines and investment in Booker Vineyard.

We complement our strategy with our investment in Canopy by expanding our portfolio into adjacent categories. Canopy is a leading cannabis company with operations in countries across the world. This investment is consistent with our long-term strategy to identify, address, and stay ahead of evolving consumer trends and market dynamics. We expanded our strategic relationship with Canopy to help position it as a global leader in cannabis production, branding, intellectual property, and retailing.

For further information on our strategy, see MD&A.

Investments, acquisitions, and divestitures

In connection with executing our strategy as outlined above, during Fiscal 2021 we completed the following transactions:

									Date						Strategic Contribution
Beer segment
			Ballast Point Divestiture						March 2020						Divestiture of the Ballast Point craft beer business, including a number of its production facilities and brewpubs; consistent with our strategic focus on our high-performing import portfolio.
Wine and Spirits segment
			Paul Masson Divestiture						January 2021						Divestiture of Paul Masson Grande Amber Brandy brand and related inventory; consistent with our increased focus on consumer-led premiumization trends.
			Wine and Spirits Divestitures						January 2021						Divestiture of lower-margin, lower-growth wine and spirits brands, wineries, vineyards, offices, and facilities; consistent with our focus on consumer-led premiumization trends.
			Concentrate Business Divestiture						December 2020						Divestiture of certain brands used in our concentrates and high-color concentrates business; consistent with our focus on consumer-led premiumization trends.
			Copper & Kings						September 2020						Acquisition of a collection of traditional and craft-batch distilled American brandies and other select spirits; supported our strategic focus to build an industry-leading portfolio of higher-end spirits brands.

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									Date						Strategic Contribution
			Empathy Wines						June 2020						Acquisition of a digitally-native wine brand, strengthened our position in the direct-to-consumer and eCommerce markets; supported our focus on meeting the evolving needs of our consumers.
			Booker Vineyard						April 2020						Investment in super-luxury, direct-to-consumer focused wine business; supported our focus on consumer-led premiumization trends and meeting the evolving needs of our consumers.
Canopy segment
			May 2020 Canopy Investment						May 2020						Incremental investment in Canopy; expanded our strategic relationship.

For further information about our significant Fiscal 2021, Fiscal 2020, and Fiscal 2019 transactions, refer to (i) MD&A and (ii) Notes 2 and 10.

Business segments

We have four reportable segments: (i) Beer, (ii) Wine and Spirits, (iii) Corporate Operations and Other, and (iv) Canopy. The business segments reflect how our operations are managed, resources are allocated, operating performance is evaluated by senior management, and the structure of our internal financial reporting. Our ownership interest in Canopy allows us to exercise significant influence, but not control, and, therefore, we account for our investment in Canopy under the equity method. Amounts included below for the Canopy segment represent 100% of Canopy’s reported results on a two-month lag, prepared in accordance with U.S. GAAP, and converted from Canadian dollars to U.S. dollars. Although we own less than 100% of the outstanding shares of Canopy, 100% of the Canopy results are included in the information below and subsequently eliminated to reconcile to our consolidated financial statements. We report net sales in two reportable segments, as Canopy is eliminated in consolidation, as follows:

			For the Years Ended
			February 28, 2021												February 29, 2020
(in millions)
Beer			$	6,074.6											$	5,615.9
Wine and Spirits:
Wine			2,208.4												2,367.5
Spirits			331.9												360.1
Total Wine and Spirits			2,540.3												2,727.6
Canopy			378.6												290.2
Consolidation and Eliminations			(378.6)												(290.2)
Consolidated Net Sales			$	8,614.9											$	8,343.5

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Beer segment

We are the #1 brewer and seller of imported beer in the U.S. market. We are also the leader in the high-end segment of the U.S. beer market, which includes the imported, craft, and ABA categories. We have the exclusive right to import, market, and sell the following Mexican brands in all 50 states of the U.S.:

Corona Brand Family									Modelo Brand Family						Other Import Brands
Corona Extra			Corona Light						Modelo Especial						Pacifico
Corona Premier			Corona Refresca						Modelo Negra						Victoria
Corona Familiar			Corona Hard Seltzer						Modelo Chelada

In the U.S., we are the leading imported beer company and have nine of the 15 top-selling imported beer brands. Modelo Especial is the best-selling imported beer, third best-selling beer overall, and the fastest-growing major imported beer brand in the U.S. Corona Extra is the second largest imported beer and sixth best-selling beer overall in the U.S.

In the past eight years we have more than tripled our production capacity in Mexico allowing us the opportunity to further expand our leadership position in the high-end segment of the U.S. beer market. In Fiscal 2021, we strengthened our competitive position in the fast-growing hard seltzer category, broadened our distribution reach, and enhanced our market share in the high-end. After our successful launch of Corona Refresca in Fiscal 2020, we launched Corona Hard Seltzer in early Fiscal 2021. With only one SKU, Corona Hard Seltzer reached the #4 best-selling seltzer brand family, and allowed us to capitalize on the robust growth of the high-end ABA category. In early Fiscal 2022, we expanded into new flavors and introduced a second Corona Hard Seltzer variety pack and expect to launch Corona Hard Seltzer Limonada in June of fiscal 2022. Additionally, we are continuing efforts focused on increasing sales distribution of products in can, draft, single-serve, and larger package size formats.

Expansion efforts continue under our Mexico Beer Projects. Since the 2013 acquisition of the imported beer business, we have invested nearly $5 billion in the Mexico Beer Projects, with approximately $700 million during Fiscal 2021. In early Fiscal 2022, we completed part of a planned expansion project at the Obregon Brewery, increasing our production capacity to approximately 39 million hectoliters and contributing to our medium-term capacity needs.

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Wine and Spirits segment

We are a leading, higher-end wine and spirits company in the U.S. market, with a portfolio that includes higher-margin, higher-growth wine and spirits brands. Our wine portfolio is supported by grapes purchased from independent growers, primarily in the U.S. and New Zealand, and vineyard holdings in the U.S., New Zealand, and Italy. Our wine and spirits are primarily marketed in the U.S. and exported to Canada and other major world markets.

In the U.S., we have eight of the 100 top-selling high-end wine brands, with Meiomi and Kim Crawford achieving the #4 and #7 spot, respectively. Some of our well-known wine and spirits brands and portfolio of brands include:

Wine Brands									Wine Portfolio of Brands						Spirits Brands
7 Moons			Meiomi						Charles Smith						Casa Noble
Cook’s California Champagne			Mount Veeder						Prisoner						High West
Cooper & Thief			Ruffino						Robert Mondavi						Mi CAMPO
Crafters Union			SIMI						Schrader						Nelson’s Green Brier
Kim Crawford			The Dreaming Tree												SVEDKA

We have been increasing our investment in support of on-trend product innovation as we believe this is one of the key drivers of overall beverage alcohol category growth. We have launched varietal line extensions behind many of our brands, such as The Prisoner cabernet sauvignon and chardonnay varietals, Woodbridge spirits barrel aged varietals, Meiomi cabernet sauvignon, and SVEDKA and High West pre-mixed cocktails in the ready-to-drink space.

Corporate Operations and Other segment

The Corporate Operations and Other segment includes traditional corporate-related items including costs of executive management, corporate development, corporate finance, corporate growth and strategy, human resources, internal audit, investor relations, legal, public relations, and information technology, as well as our investments made through our corporate venture capital function.

Canopy segment

The Canopy Equity Method Investment makes up the Canopy segment.

For further information regarding net sales and operating income (loss) of our business segments and geographic areas see Note 22.

Marketing and distribution

To focus on their respective product categories, build brand equity, and increase sales, our segments employ full-time, in-house marketing, sales, and customer service functions. These functions engage in a range of

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marketing activities and strategies, including market research, consumer and trade advertising, price promotions, point-of-sale materials, event sponsorship, on-premise promotions, and public relations. Where opportunities exist, particularly with national accounts in the U.S., we leverage our sales and marketing skills across the organization.

In the U.S., our products are primarily distributed by wholesale distributors, which generally have separate distribution networks for (i) our beer portfolio and (ii) our wine and spirits portfolio. In addition, in states where the government acts as the distributor, we distribute our products through state alcohol beverage control agencies, which set the retail prices of our products. As is the case with all other beverage alcohol companies, products sold through these agencies are subject to obtaining and maintaining listings to sell our products in that agency’s state. State governments can also affect prices paid by consumers for our products through the imposition of taxes.

Effective April 1, 2021, approximately 70% of our branded wine and spirits portfolio volume in the U.S. is expected to be distributed through an expanded relationship with a single distributor.

Trademarks and distribution agreements

Trademarks are an important aspect of our business. We sell products under a number of trademarks, which we own or use under license. We also have various licenses and distribution agreements for the sale, or the production and sale, of our products, and products of others. These licenses and distribution agreements have varying terms and durations.

Within the Beer segment, we have an exclusive sub-license to use trademarks related to our Mexican beer brands in the U.S. This sub-license agreement is perpetual.

Competition

The beverage alcohol industry is highly competitive. We compete on the basis of quality, price, brand recognition, and distribution strength. Our beverage alcohol products compete with other alcoholic and non-alcoholic beverages for consumer purchases, as well as shelf space in retail stores, restaurant presence, and wholesaler attention. We compete with numerous multinational producers and distributors of beverage alcohol products, some of which have greater resources than we do. Our principal competitors include:

Beer			Anheuser-Busch InBev, Molson Coors, Heineken, The Boston Beer Company, Mark Anthony
Wine			E. & J. Gallo Winery, The Wine Group, Trinchero Family Estates, Deutsch Family Wine & Spirits, Treasury Wine Estates, Ste. Michelle Wine Estates
Spirits			Diageo, Sazerac Company, Beam Suntory, Pernod Ricard, Bacardi USA, Brown-Forman, Fifth Generation

Canopy operates in the recreational and medicinal cannabis markets and, in their largest market, they compete with numerous licensed producers and distributors of cannabis products. In the recreational market, Canopy competes on the basis of quality, price, brand recognition, consistency and variety of cannabis products whereas these same competitive factors apply in the medical market as well as physician familiarity.

Production

As of February 28, 2021, our production capacity at our Mexican breweries was approximately 34 million hectoliters. By the end of Fiscal 2025, we expect to complete planned expansions to increase our capacity in Mexico to approximately 54 million hectoliters to support the growth of our Mexican brands, including ABAs. During this time, we will also explore options to build an additional plant at another location in Southeastern Mexico where there is ample access to water and a skilled workforce to meet our long-term needs.

We are continuing to work with government officials in Mexico to determine next steps for our suspended Mexicali Brewery construction project. For further information on these expansion and construction efforts, refer to (i) MD&A and (ii) Notes 5 and 23.

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Our Daleville facility, located in Roanoke, Virginia, supports our craft and specialty business in addition to our domestic innovation initiatives.

In the U.S., we operate 11 wineries using many varieties of grapes grown principally in the Napa, Sonoma, Monterey, and San Joaquin regions of California. We also operate two wineries in New Zealand and six wineries in Italy. Grapes are crushed in September through November in the U.S. and Italy, and in March through May in New Zealand and stored as wine until packaged for sale under our brand names or sold in bulk. The inventories of wine are usually at their highest levels during and after the crush of each year’s grape harvest and are reduced as sold throughout the year.

We currently operate four distilleries in the U.S. for the production of our spirits; two facilities for High West whiskey, one facility for Copper & Kings American brandies, and one facility for Nelson’s Green Brier bourbon and whiskey products. The requirements for grains and bulk spirits used in the production of our spirits are purchased from various suppliers.

Certain of our wines and spirits must be aged for multiple years. Therefore, our inventories of wines and spirits may be larger in relation to sales and total assets than in many other businesses.

Resources and availability of production materials

The principal components in the production of our Mexican and craft beer brands include water; agricultural products, such as yeast and grains; and packaging materials, which include glass, aluminum, and cardboard.

For our Mexican beer brands, packaging materials represent the largest cost component of production, with glass bottles representing the largest cost component of our packaging materials.

For Fiscal 2021, the package format mix of our Mexican beer volume sold in the U.S. was as follows:

The Nava and Obregon breweries receive water originating from aquifers. We believe we have adequate access to water to support the breweries’ on-going requirements, as well as future requirements after the completion of planned expansion activities. Both breweries also take advantage of onsite wastewater treatment operations to reuse water consumed as part of the production process.

As part of our efforts to solidify our beer glass sourcing strategy over the long-term, we formed an equally-owned joint venture with Owens-Illinois, one of the leading manufacturers of glass containers in the world. The joint venture owns a state-of-the-art glass production plant adjacent to our Nava Brewery in Mexico. The glass plant currently has five operational glass furnaces which supply approximately 55% of the total annual glass bottle supply for our Mexican beer brands. We also have long-term glass supply agreements with other glass producers.

The principal components in the production of our wine and spirits products are agricultural products, such as grapes and grain, and packaging materials, primarily glass.

Most of our annual grape requirements are satisfied by grower purchases from each year’s harvest which normally begins in August and runs through October in the U.S. and Italy, and begins in February and runs through May in New Zealand. We receive grapes from approximately 180 independent growers in the U.S. and 55 independent growers located in New Zealand and Italy. We enter into purchase agreements with a majority of these growers with pricing that generally varies year-to-year and is largely based on then-current market prices.

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As of February 28, 2021, we owned or leased approximately 18,200 acres of land and vineyards, either fully bearing or under development, in the U.S., New Zealand, and Italy. This acreage supplies only a small percentage of our overall total grape needs for wine production. However, most of this acreage is used to supply a large portion of the grapes used for the production of certain of our higher-end wines. We continue to consider the purchase or lease of additional vineyards, and additional land for vineyard plantings, to supplement our grape supply.

We believe that we have adequate sources of grape supplies to meet our sales expectations. However, when demand for certain wine products exceeds expectations, we look to source the extra requirements from the bulk wine markets around the world.

The distilled spirits manufactured and imported by us require various agricultural products, neutral grain spirits, and bulk spirits, which we fulfill through purchases from various sources by contractual arrangement and through purchases on the open market. We believe that adequate supplies of the aforementioned products are available at the present time.

We utilize glass and PET bottles and other materials such as caps, corks, capsules, labels, wine bags, and cardboard cartons in the bottling and packaging of our wine and spirits products. After grape purchases, glass bottle costs are the largest component of our cost of product sold. In the U.S., the glass bottle industry is highly concentrated with only a small number of producers. We have traditionally obtained, and continue to obtain, our glass requirements from a limited number of producers under long-term supply arrangements. Currently, one producer supplies most of our glass container requirements for our U.S. operations. We have been able to satisfy our requirements with respect to the foregoing and consider our sources of supply to be adequate at this time.

Government regulations

We are subject to a range of laws and regulations in the countries in which we operate. Where we produce products, we are subject to environmental laws and regulations, and may be required to obtain environmental and alcohol beverage permits and licenses to operate our facilities. Where we market and sell products, we may be subject to laws and regulations on brand registration, packaging and labeling, distribution methods and relationships, pricing and price changes, sales promotions, advertising, and public relations. We are also subject to rules and regulations relating to changes in officers or directors, ownership, or control.

We believe we are in compliance in all material respects with all applicable governmental laws and regulations in the countries in which we operate. We also believe that the cost of administration and compliance with, and liability under, such laws and regulations does not have, and is not expected to have, a material adverse impact on our financial condition, results of operations, or cash flows.

As part of our brewery expansion efforts and commitment to making a positive impact on the communities where we operate, we plan to continue working with local authorities and community-based organizations on sustainability initiatives that benefit local residents. For example, over the past several years we helped support local infrastructure investments in Obregon, Sonora, Mexico that have enhanced water efficiency in the region. This is in addition to other benefits we provide, including local job creation and fueling economic development. We are working with local authorities in Nava, Coahuila, Mexico on similar initiatives.

Seasonality

The beverage alcohol industry is subject to seasonality in each major category. As a result, in response to wholesaler and retailer demand which precedes consumer purchases, our beer sales are typically highest during the first and second quarters of our fiscal year, which correspond to the Spring and Summer periods in the U.S. Our wine and spirits sales are typically highest during the third quarter of our fiscal year, primarily due to seasonal holiday buying.

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For Fiscal 2021, our beer net sales were higher in the second and third quarters as inventory levels in our distribution channels were replenished following a COVID-19 related production slowdown at our major breweries in Mexico earlier in the year.

Human capital resources

As of March 31, 2021, we had approximately 9,300 employees, including approximately 1,200 employees through our equally-owned joint venture with Owens-Illinois. The number of employees may change throughout the year, as we employ additional workers during the grape crushing seasons. Approximately 20% of the employees are covered by collective bargaining agreements. Collective bargaining agreements expiring within one year are minimal. We consider our employee relations generally to be good.

Employee geographic data is as follows:

COVID-19 response

We have an existing Crisis Management Committee that since January 2020 has been closely monitoring the impact of the virus that causes COVID-19, on our business and our workforce. In March 2020, the WHO recognized COVID-19 as a pandemic. In response, we have implemented various measures to reduce the spread of the virus including working from home, restricting visitors to our production locations, splitting our production workforces, reducing the on-site production workforce levels, screening workers before they enter facilities, implementing social distancing, and encouraging employees to adhere to prevention measures recommended by the CDC and the WHO. We believe these prevention measures have been effective as evidenced by the minimal number of COVID-19 cases within our workforce. Additionally, we added a Chief Medical Officer to provide health-related advice and expertise to our executive officers, Crisis Management Committee, and human resources leadership teams as they make decisions to protect the health and safety of our workforce.

We value the contributions of our workforce and considered the impacts the pandemic would have on their well-being. For our production workforce, we paid “premium pay” for a period of time while such employees continued to work on-site. In addition, where employees were not able to work due to temporary facility closures, we protected their pay to ensure they had a continued paycheck. For our hospitality employees, we recognized a material portion of their pay comes from customer gratuities and we paid these employees an equivalent value during our pay protection period. Our non-production workforce is able to work remotely using various technology tools. As part of the remote office approach, we provided reimbursement for home office support ensuring our employees had the resources needed to be effective. We have implemented a formal COVID-19 policy and launched various programs to assist our employees, including engaging with third-party wellness providers to host dedicated sessions on mental and physical well-being, and increased flexibility and resources surrounding personal and family commitments. We continue to implement and evolve our comprehensive plan to return to our non-production facilities, with government recommendations and our workforce safety guiding how we manage our return to facilities.

Diversity, equity, and inclusion

Our DE&I strategic priorities are as follows (i) develop a best-in-class, diverse workforce that reflects the consumers and communities we serve – close representation gaps to achieving our diversity goals; (ii) develop an inclusive culture – create more equitable experience for underrepresented groups; harness the benefits of diversity; and (iii) enhance social equity – extend our influence within the beverage alcohol industry and communities we serve.

We provide opportunities for our employees to advance our DE&I strategic priorities through a growing community of BRGs. Our BRGs are supported at the highest level with sponsorships from our executives. See “Executive Officers of the Company” below. Each BRG is tasked with making a business impact on behalf of the

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represented group and welcome allies. In Fiscal 2021, approximately 50% of our U.S. salaried employees were members of one or more BRGs.

Monitoring human capital metrics is a critical component to ensuring we are executing on our strategy and making progress against our DE&I objectives and goals. We measure gender and racial representation to understand diversity at various levels across the organization, and assess progress over time and to drive continuous improvement. We also assess metrics throughout the human resource lifecycle to identify potential bias and barriers in our processes, including talent acquisition, turnover, engagement scores, or participation in BRG events.

Compensation and benefits

We strive to provide pay, benefits, and services that meet the needs of our employees. There are four components of compensation: (i) base pay, (ii) long-term incentives dependent on a number of factors such as geographic location and management level which include restricted stock units, stock options, and performance share units, (iii) short-term incentives, and (iv) recognition awards. Base compensation is reviewed on an annual basis ensuring it is competitive in the market and gives employees opportunities to earn more for exceeding expectations. Our total rewards program also offers valuable benefits, tools, and resources designed to help employees stay healthy and well, while achieving security, growth, satisfaction, and success.

Professional development

We are committed to empowering our employees to grow their careers. In Fiscal 2021, we spent approximately $16 million in development and training costs, which enables our people to keep reaching for what’s next — personally and professionally.

Employee engagement

We assess employee engagement through targeted pulse surveys, which provide feedback on a variety of topics, such as company direction and strategy, DE&I, individual development, collaboration, and trust. During calendar year 2020, we had an average response rate of 78% to our surveys and an average engagement measurement of 81% across our surveyed population.

Safety

We are committed to ensuring the safety of our employees. Our global EHS policy defines our dedication to providing a safe and healthy working environment and developing a culture where every employee takes responsibility for their own safety as well as the safety of others while minimizing our impact on the environment in the communities where we live and work. With a focus on continuous improvement we are developing more robust EHS management systems, strengthening employee awareness and training, and ensuring senior leadership engagement on safety. Work-related injuries resulting from the production of our beer, wine, and spirits products are well below industry average. Our recordable incident rate as compared to the industry average are as follows:

			For the Years Ended
			February 28, 2021						February 29, 2020						Percent Change
Recordable incident rate (1)			0.95						1.45						(34%)
Industry average (2)			3.50						3.35

(1)Defined as total number of worldwide Constellation work-related injuries (cases beyond first aid) per 100 full-time employees.

(2)Calculated by taking the weighted average of the most recent (2019) U.S. Bureau of Labor Statistics data for wineries, breweries, and distilleries based on our portfolio mix on February 2021 and February 2020 for the years ended February 28, 2021, and February 29, 2020, respectively.

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Empowering our employees to give back

Giving back to our communities is a value instilled by our founder, Marvin Sands, and remains core to our company’s DNA. We empower our employees to engage in the communities where they live and work in a variety of ways, including volunteering time and through a charitable matching program available to all U.S. employees.

We match donations ranging from a maximum of $5,000 to $50,000 per year, depending on management level, to charitable organizations.

$6.4 million
Fiscal 2021 corporate charitable contributions, including company match of employee donations

Corporate social responsibility

For more than 75 years, we have been committed to making a positive difference in our communities, safeguarding our environment, and advocating for responsible consumption of beverage alcohol products. Our CSR strategy is designed to align with our business goals and stakeholder interests, reflect our company values, and more directly address pressing societal needs. Specifically, we dedicate our resources towards four focus areas:

Model water stewardship for our industry – We are committed to the responsible and efficient sourcing and use of water, and engaging with our business and community partners to ensure water protection, quality, and accessibility.

Being a champion for the professional development and advancement of women – We are committed to providing resources and support to enhance the representation of women within our company, the industry, and within our communities.

Serving as a catalyst for economic development and prosperity for disadvantaged communities – We are committed to addressing the needs of disadvantaged communities, with a focus on Latinx/Hispanic and Black/African American communities.

Be a culture carrier of responsible consumption – We are committed to empowering adults to make responsible choices in their alcohol (substance) consumption by supporting fact-based education, engagement programs, and policies.

Executive Officers of the Company

Executive officers of the Company are generally chosen or elected to their positions annually and hold office until the earlier of their removal or resignation or until their successors are chosen and qualified. Information with respect to our current executive officers is as follows:

			William A. Newlands, age 62, is the President and Chief Executive Officer of the Company. He has served as Chief Executive Officer of the Company and as a director since March 2019 and as President since February 2018. He served as Chief Operating Officer from January 2017 through February 2019 and as Executive Vice President of the Company from January 2015 until February 2018. From January 2016 to January 2017 he performed the role of President, Wine & Spirits Division and from January 2015 through January 2016 he performed the role of Chief Growth Officer. Mr. Newlands joined the Company in January 2015. Prior to that he served from October 2011 until August 2014 as Senior Vice President and President, North America of
Beam Inc., as Senior Vice President and President, North America of Beam Global Spirits & Wine, Inc., from December 2010 to October 2011, and as Senior Vice President and President, USA of Beam Global Spirits & Wine, Inc. from February 2008 to December 2010. Beam Inc., a producer and seller of branded distilled spirits products, merged with a subsidiary of Suntory Holding Limited, a Japanese company, in 2014. Prior to October 2011, Beam Global Spirits & Wine, Inc. was the spirits operating segment of Fortune Brands, Inc., which was a leading consumer products company that made and sold branded consumer products worldwide in the distilled spirits, home and security, and golf markets.

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PART I			ITEM 1. BUSINESS			Table of Contents

			Robert Sands, age 62, is the Executive Chairman of the Board of the Company, having served in the role since March 2019 and as a director since January 1990. Previously, he served as Chief Executive Officer of the Company from July 2007 through February 2019. Mr. Sands also served as President from December 2002 to February 2018, as Chief Operating Officer from December 2002 to July 2007, as Group President from April 2000 through December 2002, as Chief Executive Officer, International from December 1998 through April 2000, as Executive Vice President from October 1993 through April 2000, as General Counsel from June 1986 through May 2000, and as Vice President from June 1990 through October 1993. He is the brother of Richard Sands.

			Richard Sands, Ph.D., age 70, is the Executive Vice Chairman of the Board of the Company, having served in the role since March 2019. He previously served as Chairman of the Board from September 1999 through February 2019. He has been employed by the Company in various capacities since 1979. He has served as a director since 1982. He served as Chief Executive Officer from October 1993 to July 2007, as Executive Vice President from 1982 to May 1986, as President from May 1986 to December 2002, and as Chief Operating Officer from May 1986 to October 1993. He is the brother of Robert Sands.

			James O. Bourdeau, age 56, is the Executive Vice President and Chief Legal Officer of the Company, having served in the role since December 2017 and as the Company’s Secretary since April 2017. Prior to that, he served as the Company’s Senior Vice President and General Counsel, Corporate Development, having performed that role from September 2014 until December 2017. Before joining the Company in September 2014, Mr. Bourdeau was an attorney with the law firm of Nixon Peabody LLP from July 2000 through September 2014, and a partner from February 2005 through September 2014. Mr. Bourdeau was associated with another law firm from 1995 to 2000.
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			Garth Hankinson, age 53, is the Executive Vice President and Chief Financial Officer of the Company, having served in the role since January 2020. Prior to that, he served as the Company’s Senior Vice President, Corporate Development, a position he had been in since February 2016, where he was responsible for leading all of the Company’s financial planning, reporting, and analysis activities, as well as all efforts related to mergers, acquisitions, ventures investments, and strategic alliances. From October 2009 until February 2016, he served as the Vice President, Corporate Development of the Company. From October 2007 until October 2009, Mr. Hankinson served as the Vice President, Business Development for Constellation’s prior
Canadian business, Constellation Brands Canada, Inc., which was a Canadian subsidiary of the Company during that time. From March 2004 until October 2007, he served as the Director of Corporate Development.
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			Robert Hanson, age 58, is the Executive Vice President and President, Wine & Spirits Division of the Company, having served in the role since June 2019. Prior to that, he served as Chief Executive Officer of John Hardy Global Limited, a luxury jewelry brand, from August 2014 to June 2019. He continued to serve as its Chairman of the Board until July 2020. He served as Chief Executive Officer and a Director of American Eagle Outfitters, Inc., a leading global specialty retailer of clothing, accessories, and personal care products from January 2012 to January 2014. He served Levi Strauss & Co. from 1988 to 2011 in a variety of important leadership roles across multiple brands where he led cross-functional teams, including merchandising, product
development, multi-channel operations, marketing and creative teams, in addition to a full support staff. Mr. Hanson’s roles at Levi’s included serving as Global President of the Levi’s Brand from 2010 to 2011; President, Levi’s Strauss Americas/North America from 2006 to 2010; President, Levi’s Brand U.S. from 2001 to 2006; and President/Vice President, Levi’s Europe/Africa/Middle East from 1998 to 2001.
BRG sponsorship - Win.Inspire.Support.Elevate. supporting our female community

Constellation Brands, Inc. FY 2021 Form 10-K			#WORTHREACHINGFOR I 12

PART I			ITEM 1. BUSINESS			Table of Contents

			F. Paul Hetterich, age 58, is the Company’s Executive Vice President and President, Beer Division as well as President of Crown having performed these roles since January 2016. He has been an Executive Vice President of the Company since June 2003. From January 2015 through January 2016 he performed the role of Executive Vice President, Corporate Development & Beer Operations. From June 2011 until January 2015 he served as Executive Vice President, Business Development and Corporate Strategy, from July 2009 until June 2011 he served as Executive Vice President, Business Development, Corporate Strategy and International, and from June 2003 until July 2009 he served as Executive Vice President, Business Development and Corporate
Strategy. From April 2001 to June 2003 Mr. Hetterich served as the Company’s Senior Vice President, Corporate Development. Prior to that, Mr. Hetterich held several increasingly senior positions in the Company’s marketing and business development groups. Mr. Hetterich has been with the Company since 1986.
BRG sponsorship - Supporting and Attracting Latinos United for Diversity and Development

			Thomas M. Kane, age 60, is the Executive Vice President and Chief Human Resources Officer of the Company, having served in the role since joining the Company in May 2013. Mr. Kane previously served as Senior Vice President, Human Resources and Government Relations of Armstrong World Industries, Inc., a global producer of flooring products and ceiling systems, from February 2012 to May 2013, he served as its Senior Vice President, Human Resources from August 2010 to February 2012 and served as its Chief Compliance Officer from February 2011 to February 2012. Prior to that, Mr. Kane served as Global Vice President, Human Resources for Black & Decker Power Tools, a manufacturer of power and hand tools, from 2002 to 2010. From
1999 to 2002 Mr. Kane served as Global HR leader of GE Specialty Materials, a large manufacturer of silicone products.
BRG sponsorship - Win.Inspire.Support.Elevate. supporting our female community

			Michael McGrew, age 47, has been an Executive Vice President of the Company since April 2020. Beginning December 2020, Mr. McGrew has performed the role of Executive Vice President, and Chief Communications, CSR, and Diversity Officer of the Company. Mr. McGrew joined Constellation Brands in 2014 as Senior Director, Communications for the Company’s Beer Division. He was promoted to Vice President, Communications – Beer Division in 2016 and assumed the role of Vice President, Corporate Communications in 2017. Prior to joining Constellation Brands, he held a number of roles with increasing responsibility at Grainger, then a $9 billion global provider of industrial supplies and equipment. While at Granger, from 2011 to
2013 Mr. McGrew served as Director, U.S. Business Communications, from January 2013 to October 2013 he served as Senior Director, U.S. Business & Global Supply Chain Communications and from October 2013 to September 2014 he served as Senior Director, Communications – Americas, among other roles of increasing responsibility.

			Mallika Monteiro, age 42, has been an Executive Vice President of the Company since October 2019. Beginning March 2021, Ms. Monteiro has performed the role of Executive Vice President, and Chief Growth, Strategy, and Digital Officer. From October 2019 to February 2021 she performed the role of Executive Vice President, Chief Growth and Strategy Officer and from October 2018 to September 2019, she performed the role of Senior Vice President, Chief Growth Officer. She joined Constellation in October 2016 as Vice President, Beer Innovation and was given additional responsibilities as Chief of Staff to the Company's Executive Management Committee in August 2018. Prior to joining Constellation, from July 2014 to September 2016,
Ms. Monteiro was a Senior Marketing Director at Anheuser Busch InBev. Prior to joining Anheuser Busch InBev, she served in roles of increasing responsibility with Beam Suntory Inc., including as Associate Brand Manager - Jim Beam from July 2007 to June 2009, Brand Manager - Cognac from July 2009 to December 2011, and Senior Brand Manager - Vodka, from January 2012 to June 2014.
BRG sponsorship - Constellation Parents Network

Constellation Brands, Inc. FY 2021 Form 10-K			#WORTHREACHINGFOR I 13

PART I			ITEM 1. BUSINESS			Table of Contents

			James A. Sabia, Jr., age 59, has been an Executive Vice President of the Company since May 2018. Beginning March 2021, Mr. Sabia has performed the role of Executive Vice President, Managing Director, Beer Division. From May 2018 through March 2021 he performed the role of Executive Vice President, Chief Marketing Officer. He joined the Company in August 2007 as Vice President, Marketing for the Company’s spirits business. Since then, he has served in roles of increasing responsibility with the Company. Since 2009, he has served as the Chief Marketing Officer of the Company’s Beer Division. From 2009 to June 2013, Mr. Sabia was employed by Crown, of which the Company owned a 50% interest and was the Company’s beer business
during that period. In June 2013, the Company acquired the remaining 50% of Crown, which became a wholly-owned indirect subsidiary of the Company on that date. Prior to joining the Company, Mr. Sabia was with Molson Coors Brewing Company for 17 years.
BRG sponsorship - African Americans Strengthening Constellation’s Engagement, Networking, & Development

Company Information

Our Internet website is https://www.cbrands.com. Our filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are accessible free of charge at https://www.cbrands.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an Internet site that contains reports, proxy, and information statements, and other information regarding issuers, such as ourselves, that file electronically with the SEC. The Internet address of the SEC’s site is https://www.sec.gov.

We have adopted a Chief Executive Officer and Senior Financial Executive Code of Ethics that specifically applies to our chief executive officer, our principal financial officer, and our controller, and is available on our Internet site at https://www.cbrands.com/investors. This Chief Executive Officer and Senior Financial Executive Code of Ethics meets the requirements as set forth in the Securities Exchange Act of 1934, Item 406 of Regulation S-K. We also have adopted a Code of Business Conduct and Ethics that applies to all employees, directors, and officers, including each person who is subject to the Chief Executive Officer and Senior Financial Executive Code of Ethics. The Code of Business Conduct and Ethics is available on our Internet website, together with our Global Code of Responsible Practices for Beverage Alcohol Advertising and Marketing at https://www.cbrands.com/story/policies. Copies of these materials are available in print to any shareholder who requests them. Shareholders should direct such requests in writing to Investor Relations Department, Constellation Brands, Inc., 207 High Point Drive, Building 100, Victor, New York 14564, or by telephoning our Investor Center at 1-888-922-2150.

Our Board of Directors Corporate Governance Guidelines and the Charters of the Board’s Audit Committee, Human Resources Committee (which serves as the Board’s compensation committee) and Corporate Governance Committee (which serves as the Board’s nominating committee) are accessible on our Internet website at https://www.cbrands.com/investors. Amendments to, and waivers granted to our directors and executive officers under our codes of ethics, if any, will be posted in this area of our website.

The information regarding our website and its content is for your convenience only. The content of our website is not deemed to be incorporated by reference in this report or filed with the SEC.

Constellation Brands, Inc. FY 2021 Form 10-K			#WORTHREACHINGFOR I 14

PART I			ITEM 1A. RISK FACTORS			Table of Contents