The Crown acquisition is truly transformational. Constellation will control 6 of the top 20 import beer brands in the U.S., and the Corona brand should continue to appeal to the growing Hispanic demographic in the U.S.
Constellation's portfolio of premium wines should allow it to generate above-average margins if consumers trade up to higher-end wines.
As the world's largest wine producer, Constellation has greater scale than its smaller rivals. Read more
Following the Crown deal, Constellation is highly leveraged. Although the business generates solid cash flows, a disruption in operations could affect its ability to service its debt.
Consumers have demonstrated little brand loyalty in the wine category. Moreover, consumers' inclination to try new types and brands of wine within their preferred category and price range makes it difficult for winemakers to maintain pricing power.
The firm's spirit brands (Svedka vodka and Black Velvet Canadian whiskey) lack the premium price point and scale of many of its competitors. Read more
We believe Constellation Brands has a standard level of stewardship. Current CEO Robert Sands and former CEO (current chairman of the board) Richard Sands are sons of Constellation founder Marvin Sands. The Sands family controls a large portion of Constellation's Read more
Constellation Brands is a total alcohol company selling wine, spirits, and beer, primarily in the United States. Notable premium wine brands in the firm's portfolio include Read more