Fifth up in "10k in 10 tweets" is Constellation Brands
The company makes beer, wine and spirits. It's the owner of Modelo and Corona in the US.
[THREAD] 🔽
The company makes beer, wine and spirits. It's the owner of Modelo and Corona in the US.
[THREAD] 🔽
1/ Below you can see the company's most popular beer brands. They have exclusive ownership of these Mexican brands in the US.
2/ In 2013, Anheuser-Busch InBev bought Grupo Modelo, but had to split the acquisition with Constellation because of anti-trust concerns.
In short, Constellation got the rights for the US, InBev got the rights internationally.
In short, Constellation got the rights for the US, InBev got the rights internationally.
3/ The company also has these wine and spirit brands.
4/ This the company's clear strategy.
Move into higher-end brands and sell off the under-performing ones.
Move into higher-end brands and sell off the under-performing ones.
5/ As you can see, here are the divestitures.
They sold San Diego brand, Ballast Point. And later, sold a bunch of wine brands to Gallo Winery.
They sold San Diego brand, Ballast Point. And later, sold a bunch of wine brands to Gallo Winery.
6/ Beer makes up roughly 70% of the company's sales with wine/spirits accounting for the remainder.
7/ Beer is also the most profitable segment.
It has gross margins of 56% & it makes up 75% of total gross profit.
Further, beer's EBIT margins are 40% & without adjusting for corporate expenses, it makes up ALL of the profit.
People must love their Corona, Modelo & Pacifico.
It has gross margins of 56% & it makes up 75% of total gross profit.
Further, beer's EBIT margins are 40% & without adjusting for corporate expenses, it makes up ALL of the profit.
People must love their Corona, Modelo & Pacifico.
8/ The company also bought a sizable stake in Canopy, the cannabis company.
Constellation really tries to stay current with the trends.
It owns roughly 40% of Canopy. Further, Anheuser-Busch has partnered with Tilray to create cannabis-infused drinks.
Constellation really tries to stay current with the trends.
It owns roughly 40% of Canopy. Further, Anheuser-Busch has partnered with Tilray to create cannabis-infused drinks.
9/ Last year, the company sold nearly 312 million 24-packs.
That's almost 7.5 billion individual beers.
On average, the cost of a 24-pack was $18. This business definitely has pricing power as shown by its profitability and price inelasticity.
That's almost 7.5 billion individual beers.
On average, the cost of a 24-pack was $18. This business definitely has pricing power as shown by its profitability and price inelasticity.
10/ All in all, Constellations Brands has a strong position because it has exclusive manufacturing rights to brands like Corona, Modelo and Pacifico in the US.
The company has doubled down on these brands and divested the distractions.
The company has doubled down on these brands and divested the distractions.
