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Constellation Brands is like Procter & Gamble for alcoholic beverages.

Think of it as the Coca-Cola of alcohol.

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• Beer: Constellation Brands produces and imports a wide range of beer brands, including popular choices like Corona and Modelo, encompassing various styles and hard seltzers.
• Wine: The company offers a diverse portfolio of wine brands, from everyday selections to premium labels such as Kim Crawford, Meiomi, and Robert Mondavi.
• Spirits: Constellation Brands markets several spirits brands, including tequila (Casa Noble, Mi CAMPO), whiskey (High West), and vodka (SVEDKA).

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Constellation Brands (STZ) sells its products primarily to other companies and agencies, operating on a business-to-business (B2B) model. Its major customers fall into the following categories:

• Wholesale Distributors: These companies purchase products directly from Constellation Brands and then distribute them to retailers and on-premise locations. Many large alcohol wholesale distributors are privately held.
• Retailers: These include grocery stores, mass merchandisers, and dedicated liquor stores that sell Constellation Brands' products directly to consumers. Major public retail companies that would be considered significant customers due to their scale and broad distribution of alcoholic beverages include:
  • Walmart Inc. (WMT)
  • The Kroger Co. (KR)
  • Target Corporation (TGT)
  • Costco Wholesale Corporation (COST)
  • Albertsons Companies, Inc. (ACI)
• On-Premise Locations: This category includes bars, restaurants, hotels, and other venues where alcohol is consumed on-site.
• State Alcohol Beverage Control Agencies: In some states, these government agencies act as the sole wholesale distributor or control retail sales of alcoholic beverages.

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Bill Newlands, President and Chief Executive Officer

Bill Newlands is Constellation's President and Chief Executive Officer, a role he assumed in March 2019. He joined the company in 2015 as Executive Vice President, Chief Growth Officer, and subsequently led the Wine & Spirits Division, served as Chief Operating Officer, and then as President. Prior to joining Constellation Brands, Mr. Newlands held several senior leadership roles in the beverage alcohol industry for over 30 years. This includes serving as President, North America at Beam, Inc., where under his leadership, Beam became one of the fastest-growing companies in its category. He also previously served as President and CEO of Allied Domecq Wines USA (2002-2005), CEO and board director of wine.com (1999-2001), and Managing Director, U.S. and Global Marketing Officer at LVMH Chandon Estates (1996-1999). Mr. Newlands has also served as a director of Hormel Foods Corporation since November 2018 and as its Lead Director since January 2023.

Garth Hankinson, Executive Vice President and Chief Financial Officer

Garth Hankinson is Constellation's Executive Vice President and Chief Financial Officer, a position he was promoted to, effective January 13, 2020. Mr. Hankinson joined Constellation Brands in 2001 and has held various senior leadership roles within the company, including Manager, Director, and Vice President of Corporate Development. He also served as Vice President, Business Development for Vincor Canada, an operating company previously owned by Constellation Brands. Before his appointment as CFO, he was Senior Vice President, Corporate Development and Financial Planning and Analysis, overseeing the company's inorganic growth initiatives, including identifying potential targets for mergers, acquisitions, joint ventures, strategic partnerships, or divestitures, and managing the company's venture investment fund. Prior to joining Constellation, Mr. Hankinson worked in sales operations and business intelligence at Xerox Corporation and as an auditor and analyst at Citicorp, Inc.

Jim Bourdeau, Executive Vice President and Strategic Advisor

Jim Bourdeau serves as Constellation's Executive Vice President and Strategic Advisor. In this role, he reports directly to the President and Chief Executive Officer. Previously, Mr. Bourdeau was Constellation's Chief Legal Officer, where he was responsible for corporate governance, government affairs, and all company-wide legal functions.

Sam Glaetzer, Executive Vice President and President, Wine & Spirits Division

Sam Glaetzer is Constellation's Executive Vice President and President, Wine & Spirits Division. He is responsible for all U.S. and international commercial and operations functions related to the company’s wine and spirits business. Mr. Glaetzer joined Constellation in New Zealand in 2014, bringing over 30 years of industry experience. His background includes leadership positions with Treasury Wine Estates/Foster's, where he held roles such as Environmental Engineer, Vintage Winemaker, Senior Winemaker, Group Winemaker, and General Manager for Winery Operations and Production.

Paula Erickson, Executive Vice President and Chief Human Resources Officer

Paula Erickson is Constellation's Executive Vice President and Chief Human Resources Officer, a role she assumed effective April 21, 2025. She is responsible for leading the company's human resources division. Before joining Constellation Brands, Ms. Erickson was the Senior Vice President, Chief People, Culture & Communications Officer at Beam Suntory Inc. Her career also includes 17 years with Ace Hardware Corporation, where she held various roles across human resources, corporate communications, public relations, advertising, and brand development.

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1. Dependence on Mexican Beer Brands and Production Facilities/Supply Chain: Constellation Brands is heavily reliant on its Mexican beer brands, such as Corona and Modelo, and the production capabilities of its breweries in Mexico to meet demand. The ongoing expansion, optimization, and construction activities at these facilities are multi-billion-dollar endeavors that carry inherent risks of completion delays, cost overruns, and potential asset impairments. The company also faces operational risks due to its dependence on a limited group of suppliers for critical raw materials, like glass bottles and aluminum cans, which could lead to supply chain disruptions. Furthermore, the business is exposed to macroeconomic headwinds and regulatory changes, including potential tariffs on imports from Mexico, which could increase costs and impact profitability.

2. Declining Performance and Impairment in Wine and Spirits Segment: Constellation Brands has experienced significant challenges in its Wine and Spirits segment, including declining consumer demand and retailer destocking, which have led to a notable decrease in net sales. This segment has also seen substantial goodwill and intangible asset impairments, reflecting underlying difficulties and a need for strategic reassessment. The company has engaged in strategic divestitures within this segment to focus on premiumization and higher-margin assets, indicating ongoing efforts to address the underperformance.

3. Shifts in Consumer Preferences and Overall Decline in Alcohol Consumption: A significant long-term risk for Constellation Brands is the potential for declining consumption of its alcoholic products due to evolving consumer preferences, economic conditions, and regulatory shifts. There is an observed trend of lower alcohol consumption among younger generations, and concerns exist regarding the potential impact of new anti-obesity drugs on overall alcohol consumption. The company's key beer segment has already shown signs of softening demand, particularly among its core Hispanic consumer base, which could erode market share and affect future growth prospects.

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The increasing legalization and mainstream acceptance of cannabis products in various markets represent a clear emerging threat to Constellation Brands' core alcohol business. As cannabis becomes more accessible and socially normalized, it could act as a direct substitute for alcohol among consumers, leading to a potential shift in discretionary spending and consumption habits away from traditional beer, wine, and spirits.

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Constellation Brands operates in the beer, wine, and spirits markets. The addressable markets for their main products are substantial in both the U.S. and globally.

Beer Market

• U.S. Market: The U.S. beer market was valued at approximately USD 130.07 billion in 2024. Another estimate placed the U.S. beer market at USD 110.9 billion in 2023, projected to reach USD 161.06 billion by 2033.
• Global Market: The global beer market size was estimated at USD 839.31 billion in 2024 and is projected to reach USD 1,248.3 billion by 2030, growing at a compound annual growth rate of 6.8% from 2025 to 2030.

Wine Market

• U.S. Market: The U.S. wine market size was estimated at USD 75.3 billion in 2024 and is projected to reach USD 157.3 billion by 2033.
• Global Market: The global wine market size was valued at USD 508.14 billion in 2024 and is estimated to reach USD 793.94 billion by 2033.

Spirits Market

• U.S. Market: The U.S. spirits market size was estimated at USD 76.16 billion in 2024 and is expected to reach USD 112.87 billion by 2033.
• Global Market: The global spirits market size was estimated at USD 424.82 billion in 2024 and is expected to reach USD 641.84 billion by 2033. The total retail value of the global spirits market was estimated at USD 811.261 billion in 2023.

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Expected Drivers of Future Revenue Growth for Constellation Brands (STZ)

• Continued Strength and Expansion of the Core Beer Portfolio: Constellation Brands expects sustained high-single-digit net sales growth in its beer business, primarily driven by the strong performance and market share gains of iconic brands such as Modelo Especial and Pacifico. Modelo Especial has consistently been a top share gainer and the leading beer brand in the U.S. market, while Pacifico has demonstrated outstanding depletion growth.
• Premiumization Strategy Across Beer, Wine, and Spirits: The company is focused on its premium and high-end offerings across its entire portfolio. This strategy includes leveraging higher-margin products in its wine and spirits segments, with an emphasis on growing direct-to-consumer (DTC) and international markets for its premium wine, fine wine, and craft spirits brands.
• Strategic Pricing Actions: Constellation Brands actively implements strategic pricing initiatives, including annual price increases of approximately 1-2%, across its product portfolio. These targeted price adjustments, applied at the SKU-level and market-specific, contribute directly to revenue growth.
• Product Innovation and Brand Extensions: The company continues to drive growth through disciplined innovation and the launch of new products and brand extensions within its key categories. Examples include the success of new offerings within the Modelo Chelada franchise and the introduction of products like Corona Sun Brew and Modelo Oro, which capitalize on existing brand equity and consumer trends.

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Share Repurchases

• Constellation Brands authorized a new $4 billion share repurchase program on April 9, 2025, which is set to expire on February 29, 2028. This authorization replaced a previous $2 billion program that had approximately $1.5 billion remaining.
• During the first half of fiscal year 2026 (through August 2025), the company executed $604 million in share repurchases.
• An accelerated share repurchase (ASR) agreement of $500 million was entered into on April 7, 2022.

Outbound Investments

• Constellation Brands divested its mainstream wine brands, including Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét sparkling wine, to The Wine Group. The agreement was announced on April 9, 2025, and the transaction closed on June 2, 2025.
• This divestiture is part of a strategic shift to focus on higher-growth, higher-margin premium wine and spirits brands, primarily those priced at $15 and above.
• The company also divested the SVEDKA brand.

Capital Expenditures

• For fiscal year 2026, Constellation Brands projects capital expenditures to be approximately $1.2 billion.
• The primary focus of these expenditures is a significant investment of about $1.0 billion in the beer business for capacity expansion, including the buildout of a third brewery in Veracruz, Mexico, and the expansion of existing breweries.
• Historically, capital expenditures averaged $1.082 billion from fiscal years 2021 to 2025, with a peak of $1.269 billion in fiscal year 2024 and $1.214 billion in fiscal year 2025.