Analysis - Constellation Brands to seek more beer acquisitions?
Constellation has high hopes for Corona in the US
Constellation Brands' appetite for beer, since taking full control of the Crown Imports JV last year, looks to be growing.
The group, which now controls the US production and distribution of Grupo Modelo's brands such as Corona Extra and Modelo Especial, has revealed it sees further opportunities for M&A in the category and a chance to play in the craft sector. Speaking at this week's Beer Business Daily summit in Phoenix, Arizona, Crown's CEO, Bill Hackett, said there was “absolutely” a chance to get into crafts, according to Stifel analyst Mark Swartzberg today. Hacket talked up the prospect on the basis of the company's “strong route to market”.
Constellation, now the US's third biggest beer player, has indicated it is aiming to bag a 20% share of beer sales in the US market, the analyst says. Even with the expansion of Constellation's Mexico brewery, Stifel foresees that “meaningful brewing acquisitions are likely, eventually”.
In the near future, Constellation will be upping its focus on the peak summer selling season for its beer maketing and advertising activity, CLSA analysts believe. “Television remains a key medium, but the company is adding an increasing digital component to marketing as well,” CLSA says.
Sport remains a key focus for promoting beer, where Constellation is spending “significant marketing dollars”, CLSA says. Corona is the shirt sponsor for Los Angeles-based MLS team Club Deportivo Chivas USA and it also sponsors US soccer star Clint Dempsey. The company has also linked to boxing, having sponsored the Mayweather-Canelo fight last year.
Modelo Especial is now a 50m-case brand, Constellation revealed, while Hackett believes that the only reason that the Modelo Especial brand is not 'the next Corona' is because the latter still has further to go.
Watch this space.
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Grupo Modelo S.A.B. de C.V. (Grupo Modelo) is one of the leading producers of beer in Mexico. It produces, distributes and markets beer. Grupo Modelo brews and distributes 14 brands such as Corona Ext...
Grupo Modelo is the leading company in beer in Mexico and its strategic direction has always pointed to international consumers as well. A recent example of this is its objective for 2015 which is to ...
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