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Constellation’s Beer Portfolio Continues to Buck Trends

We remain impressed by the firm’s beer business, but shares are not a bargain.

Sonia Vora Mar 29, 2018

Securities In This Article

Constellation Brands Inc Class A

Narrow-moat

From our vantage point, Constellation’s focused beer portfolio (concentrated in faster-growing categories like craft and imported beer) and sustained investments behind its brands, including advertising and innovations in packaging sizes, have allowed its offerings to enjoy outsize growth as the overall domestic beer industry continues to flounder (we estimate volume declined 1% in 2017). In this context, we appreciate the 20% increase in dedicated media spend slated for fiscal 2019, which should sustain demand for core brands Corona and Modelo (depletions grew 18% and 6%, respectively, during the quarter).

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About the Author

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Sonia Vora

Equity Analyst

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Sonia Vora is an equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She covers beverage stocks in the consumer sector. She joined Morningstar in 2014.

Vora holds a bachelor’s degree in economics from the University of Chicago.

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