January 17, 2019

Constellation Brands is Crushing Growth at 9.5%

corona modelo beers

Constellation Brands recorded a healthy 9.5% increase in net sales during its third quarter as its Corona and Modelo brands continue to drive growth. Viva Mexican Beer.

Constellation Brands net revenue for the quarter were $1.97 billion as the firm’s beer division grew 16%. However, sales growth in the company’s wine and spirits segment was stagnant, up 0.4%. Net income for the quarter was down 37.1% to $312.1 million. Beer is winning.

The company – which also owns Pacífico and #BallastPoint beers – said the volume growth of its beer segment was largely attributable to continued consumer demand, increased marketing spend and new product introductions.

Marketing as a percentage of net sales increased to almost 11% for the quarter.

Constellation Brands

Beer Marketing is once again the main way brands are gaining sales. Marketing is driving sales.

corona beer marketing

In connection with the company’s business strategy for its beer segment, Constellation has almost tripled the production capacity of its brewery in Nava, Coahuila, Mexico, since its June 2013 acquisition. In addition, construction of a new brewery in Mexicali, Baja California, Mexico, is progressing and it continuing to invest to expand the Oregon Brewery in Mexico which they acquired in December 2016.

Constellation Brands CEO Rob Sands, who is due to step down from his role in March, said: “The results delivered by our beer business mark the highlight of our third-quarter performance. The Modelo and Corona brand families continue to be on fire, fueled by strong velocities, excellent distribution gains and highly incremental innovation.”

In an earnings call, he said: “We believe the emerging cannabis space represents one of the most significant global growth opportunities of the next decade and frankly, our lifetime, an opportunity that is opening up much more rapidly than originally anticipated.”

For its fiscal 2019 outlook, Constellation expects its beer business to post net sales growth at the high end of the 9%-11% range and for its wine and spirits unit, it predicts both net sales and operating income to decline low-single digits.

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