1-selling beer brand in America. Constellation purchased the U.S. rights to Mexican-brewed Corona in 2013. It is, however, still far behind the leaders -- Mark Anthony Brands' White Claw and Boston Beer's Truly. Chris is on Twitter @chriskatje Facebook Page: https://www.facebook.com/katjestockworldpicks?ref_type=bookmark. Constellation Brands Does Not Expect Disruption of Corona and Modelo Brands; Posts $8.34 Billion in Sales for FY 2020. Hard seltzer sales may be what keep other brewers afloat, but Constellation Brands (STZ -0.03%) continues to ride its Corona and Modelo family of beer to new heights. Constellation launched Corona Hard Seltzer in February 2020 and said in October the brand had a 6% share of the U.S. seltzer market, making it the fourth The Incredible Rise of Modelo Especial, the Most Important Beer in Must be the lots of Rochester judges on STZ books! Investors who have followed the acquisition trail have seen strong gains along the way. Canopy Growth (TSX: WEED) (NYSE: CGC) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. Truist said in a report cited by Seeking Alphathat the lawsuit is likely to create an overhang for Constellation for at least the next few quarters. 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra Corona Extra, brewed by Grupo Modelo, is the number one selling imported beer sold in the United States and the number six selling beer overall. In addition to risks and uncertainties associated with ordinary business operations, the forward-looking statements contained in this news release are subject to risks and other factors and uncertainties, including that the expected impact and benefits of the transaction may not materialize in the manner expected, or at all; circumstances may warrant that Canopy Growth use the proceeds from the transaction for different purposes than stated above; and other factors and uncertainties disclosed from time-to-time in Constellations filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended February28, 2018 and its Quarterly Report on Form 10-Q for the fiscal quarter ended August31, 2018, or in Canopy Growths filings with the Canadian Securities Administration or with the United States Securities and Exchange Commission, including its annual information form dated June28, 2018, which could cause actual future performance to differ from current expectations. Raleigh Convention Center, 500 S Salisbury St, Raleigh, NC, Coca-Cola announced plans to introduce its own energy drink, battle about corn syrup against its bitter rival, VC funding for food and beverage plunging amid challenging environment, data shows, Beyond Meat launches smash burgers in foodservice, PepsiCos Muscle Milk bulking up beyond the gym, A new TreeHouse: Private label giant builds for success by thinking small, CEO says, Inside Jones Sodas expansion of its cannabis-infused line to new states, Pepsi fuses ketchup and cola to strengthen link to hot dogs for July Fourth, 3 Video Ad Creative Challenges Marketers Must Master And How CaaS Solves Them, How Technology Is Transforming In-Store Marketing, How to Attract, Retain and Empower the Front Line to Boost Your Bottom Line. Shares fell 1.5% in the session to close at $232.52 apiece, though. The new king of beers is a Mexican-American success story Constellation Brands stock trades at 24 times trailing earnings and 22 times next year's estimates. 1 growth beer brand, racking up $144 million in extra sales compared to the same period in 2020. Constellation makes wines, spirits and beer, including Corona, Modelo and Pacifico as well as beers from craft brewer Ballast Point. At the very end of 2018 I last looked at Constellation Brands, as I wondered if the company would become a pleasure play. Founded in 1945, Constellation has grown to become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio; about 40 wineries, breweries and distilleries; and approximately 10,000 talented employees. in Chicago, Illinois. Subsequently, Canopy Growth management welcomes Constellations President and Chief Operating Officer BillNewlands and Executive Vice President and Chief Financial Officer DavidKlein, as well as current Constellation Board Members JudySchmeling, former HSNi LLC chief operating officer, and RobertHanson, chief executive officer of John Hardy Global Limited, to the Canopy Growth Board. We will have solutions for the long-term to make sure that we are able to meet the strong consumer demand that we continue to have for our brands.. The company saw its stock price gain 87% in 2013. And the cannabis segment is untested, but it could prove to be the biggest growth driver yet. I have no business relationship with any company whose stock is mentioned in this article. I have no business relationship with any company whose stock is mentioned in this article. CHICAGO, IL - JUNE 07: In this photo illustration, bottles of Corona beer are shown on June 7, 2013 [+] in Chicago, Illinois. Constellation told the wire service it was "very surprised"by the development and said the claims, including that its seltzer should not be classified as a beer, were without merit and an attempt to suppress a competitor. While Corona Hard Seltzer also helped the category, there are questions about whether it can maintain its velocity. From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Newlands called FY20 another excellent year of strong results marked by milestones, including record cash flow and double-digit operating income growth for the companys beer business. With the move in the stock so far this year largely coinciding with the wider market, while the names certainly has defensive qualities, I am getting more compelled to the shares as they slowly start to look compelling enough to initiate a small position here. This copy is for your personal, non-commercial use only. Constellation no doubt believes hard seltzer should be considered a beer, and lists it under the beer category on its website. As of press time, Constellation Brands (STZ) stock was up around 1%, to around $132, which is down considerably from its 52-week high of $214.48. The company already distributes the companys CBD beverage Quatreau. Per Nielsen data, Modelo Especial has been the No. Its Modelo Especial saw 12% depletion growth as it expanded upon its position as the top brand of the high-end beer category, while Constellation says it also became the No. It says the first breaches US and Mexican laws that strictly limit the use of the word Tequila, and the second breaches Constellations sub-licence to sell Mexican-style beer because Bourbon has nothing to do with Mexico. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the publics understanding of cannabis, and through its wholly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. In this service we cover major earnings events, M&A, IPOs and other significant corporate events with actionable ideas. Current draft sales of 2% expected to hit 10% over time. The Motley Fool has a disclosure policy. Copyright 2023 Dow Jones & Company, Inc. All Rights Reserved. These margin increases should continue, as the result of full ownership of Crown Imports. Well, until Monster jumped over it in January. Driving the growth of the Corona brand was line extensions Corona Refresca and Corona Premier, which posted double-digit growth, and 16% depletions growth of Modelo Especial. In addition, Constellation is the world leader in premium wine, selling great brands that people love, including Robert Mondavi, Clos du Bois, Kim Crawford, Meiomi, Mark West, Black Box, Ruffino and The Prisoner. How the court rules in the Constellation-AB InBev case is unlikely to be the end, with the loser likely to appeal. If they could pull it off, you might see the more significant players- Coca-Cola, Pepsi, AB Inbev, and Molson Coors- becoming more active in searching for new opportunities. Bud Light Seltzer had 9.7% market share. Those shares traded in the CAD $60s in 2019, yet now trade at $18, making that the company has lost billions on this investment already. Despite shifting gears on production after a brewery in Mexicali, Baja California, lost a voter referendum, the brewer is still anticipating growth. Corona Extra, brewed by Grupo Modelo, is the number one selling imported beer sold in the United States and the number six selling beer overall. Photo: Gabby 1 brand in market share gains in the entire U.S. beer market. Please. I wrote this article myself, and it expresses my own opinions. Is Constellation Brands Making a Big Mistake? | The Motley Fool Constellation estimates the interest expense associated with this transaction to approximate $55 million before tax with an approximate $0.25 impact on fiscal 2019 comparable basis EPS results. Constellation Brands, one of the world's largest wine companies, is expected to become the third-largest beer supplier in the United State today with a $5.3 billion purchase of the U.S. distribution rights of Grupo Modelo beers from Anheuser Busch InBev. AB InBev sues Constellation over Modelo beer Corona Beer Maker Constellation Supports Launch Of New CBD Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector. Earlier in the day, the maker of Corona and Modelo beer posted a top-and-bottom line beat for its fiscal second quarter. Excluding the goodwill impact, operating profits totaled $2.60 billion last year as the company reported a $429 million interest bill and a $74 million other gain as well. Examples of such statements include but are not limited to those related to the anticipated use of proceeds, future expansion and growth, future success, the realization of Canopy Growths long-term strategic vision, the creation of shareholder value, and estimated interest expense and its impact on EPS results. Current Price $242.38 Price as of June 23, 2023, 4:00 p.m. The national rollout continues and will see the brand readily available at bars in time for summer and the Cinco de Mayo holiday. Corona Each company is a leader in its respective spaces and could benefit from the effects of cross-pollination should a deal go down. Constellation Brands has a great portfolio of beer, wine, and spirits brands. Constellation Brands (NYSE:STZ) has the questionable honor to be the owner of the Corona beer brand which has served the company well in recent years, as the namesake Corona crisis is holding the entire world in lockdown at the moment. While one car argue that a great deal of alcohol consumption will be replaced at home, the brands of the company do not make me optimistic. SAN FRANCISCO, CA, June 23, 2023 Constellation Brands, Inc. (NYSE: STZ), a leading beverage alcohol company, announced today that it has acquired Luxury Napa Constellation said Grupo Modelos claims were without merit and that it had fully complied with the sub-licence terms. https://www.wsj.com/articles/constellation-brands-stakeholders-propose-ending-majority-control-of-corona-brewer-11649075693. Constellation Brands Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. It plans on spending between $700 million and $900 million to support 15 million hectoliters of capacity expansion through fiscal 2025 for its beer segment, which includes hard seltzer in its alternative beverage alcohol space. That is a bit too simplistic as well. Monster Beverage And Constellation Brands Merger Could Shake 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. Constellation Brands doesn't seem to be sweating those details at the moment. It recently. So is now the time to buy its shares? Canopy Growth management wishes to thank ChrisSchnarr and MurrayGoldman for their contributions to the company. To learn more, follow us on Twitter @cbrands and visit www.cbrands.com. It told Reuters it "fully and completely"complied with the terms of the sub-license agreement and would defend its rights. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. This means that every time you visit this website you will need to enable or disable cookies again. Hard seltzer, in particular, is among the fastest-growing segments of the alcohol sector, with nearly every major beer company having at least one offering. With on-premise consumption virtually on hold indefinitely in the U.S., investors and analysts asked Newlands and chief financial officer Garth Hankinson if Constellations beer sales and margins are as affected as other breweries. Furthermore, this valuation marks a reversal from the premium at which shares have traded in recent years, which makes that a beer giant might have an interest in the name as well, although the cannabis investment could become an issue than from ta PR point of view. Topics covered: manufacturing, packaging, new products, R&D, and much more. In his view, a lot of people dont know or realize that the active ingredients in pre-mixed drinks deteriorate, so the consumer is not getting the potency they think they are. Constellation said Modelos claims were without merit and an attempt to restrain a strong competitor. This creates some tension on the balance sheet, as the company has leverage ratio of about 4.2 times. This news release contains forward-looking statements. Constellation Brands has more than 100 brands in its portfolio. Aside from beer, Constellation Brands saw wine sales grow 3% and spirits sales decline 5%. Now the Mexican arm of AB InBev has accused Constellation of a second breach of their deal allowing Constellation to sell Mexican beers in the United States. Constellation Brands WebHow Constellation Brands the owner of Corona beer is tackling COVID-19 . 03606414. That would be because Constellation has an almost 40% stake in Canopy Growth Corp, a Canadian cannabis company that sells THC-infused drinks across Canada. Constellation Brands has been a long term success, in part driven by the Corona beer brand. We believe Monster could be less interested in Constellations wine & spirits business vs. the beer business in a hypothetical acquisition, given potentially lower synergies in wine and a lower topline growth profile of the business," said Modi. The soda giant owned more than 16% of Monster's shares and had a deal to distribute its drinks. Well, it appears that the two companies are still in talks and that a potential deal may be announced in the next few weeks. Constellation declined to offer guidance for FY21, citing potential impacts on the business from COVID-19.. Some stadiums do not carry bottles, especially those made of glass due to safety concerns. Any merger of this size would have to undergo government scrutiny and win approval. This investment provides Canopy Growth with significant funding needed to build scale in the more than 30 countries currently pursuing federally permissible medical cannabis programs, while establishing the foundation needed to supply new recreational adult-use markets as cannabis becomes legal in markets around the world. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Making the world smarter, happier, and richer. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements. (Photo Illustration by Scott Olson/Getty Images). On Fridays earnings call, they said they continue to produce product and that the Mexican government has not ordered any shutdown. Constellation Brands, which owns Corona, just released a statement fighting the notion that recent events have negatively affected the brand. This is a BETA experience. The company reported a modest 2.8% increase in 2019 sales, with fourth quarter sales growth being much more impressive at growth rates roughly double the annual number. Rich Duprey has no position in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. Corona Constellation Brands net sales, encompassing its beer, spirits and wine business, increased 3%, to $8.344 billion for the full 2020 fiscal year. AB InBev, which confirmed the filing, said Mexicos Tequila Regulatory Council had also demanded Constellation cease its use of the word tequila in marketing. One thing that is for certain: This. Constellation Brands announced in June 2013 that it had completed its acquisition of Grupo Modelos U.S. beer business from AB InBev for about $4.8 billion. Last week, Constellations $1.4 billion brewery project in Mexicali, Baja California, Mexico, hit a roadblock when voters rejected its construction in a local referendum. Although Constellation reported a profit of $366.5 million in Q3, the beer maker still incurred a loss of $71.1 million relating to its investment in the Canadian Please disable your ad-blocker and refresh. Beer and marijuana could prove a potent combination for Constellation Brands. Mark Anthony Brands'White Claw and Truly, owned by Boston Beer, collectively hold 75% of the market, It's not hard to see why AB InBev is feeling a little concerned. Do your own research or obtain suitable personal advice. Perhaps the next plague coming out of China should be named budweiservirus, teslavirus, or cokevirus? We are using cookies to give you the best experience on our website. If you like to see more ideas, please subscribe to the premium service "Value in Corporate Events" here and try the free trial. To report a factual error in this article. Constellation has been on quite a tear in the market as their beer brands Corona Extra and Modelo Especial continue to gain market share. Under normal circumstances the current leverage ratio is perfectly manageable as a 14 times earnings multiple is very low. 2010-2023 BevNET.com, Inc. 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Michelle for Southern Peach Flavor, Preiss Imports Adds Ferdinands Saar Collection to its International Spirits Portfolio, Humboldt Distillery Expands to Markets Outside of California. Market open. The lawsuit said that the agreement only allowed Constellation to use Corona in the U.S. when it came to beer. In the U.S., it controls beer brands like Corona, Modelo Especial, Negra Modelo, and Pacfico. With the onset of the COVID-19 pandemic, Constellation Brands (STZ -0.03%) ran into a situation it had never encountered before: Many of its primary channels for making sales were closed off. With hardly any cash at hand, the company has access to a $2 billion credit line and will see $850 million coming in from the Gallo deal, the activities which the company is divesting. While a rapid recovery of beer and wine sales should provide an immediate tailwind for the company, another potential one sits further down the road: the federal legalization of marijuana. With EBIT at around $2.6 billion, I peg EBITDA at just $2.9 billion. The industry average is 10%, and Constellation believes it can achieve the same number. Its Outlook Isnt Great Either. Got $3,000? Corona Extra remains in three test markets as a draft beer brand, and with strong demand, should see additional rollout locations soon. When AB InBev took full control of Grupo Modelo in 2013, it was obliged by US antitrust regulators to sell the Mexican companys business in the United States to Constellation. However, in February AB InBev began court proceedings claiming that that the 2013 deal refers only to beer, not to other lines such as alcohol flavoured waters. During this time, we are focused on the channels the consumer is choosing, namely three-tier ecommerce, direct-to-consumer and the off-premise, especially big box, grocery and club channels, where we are working diligently to ensure high end stock positions for our key SKUs, Newlands said.