Blog: Modelo & Constellation - Everyone's a winner, baby?
Olly Wehring | 24 July 2006
The news last week that Grupo Modelo has teamed up with Constellation Brands to beef up its presence in the US has been greeted positively by industry observers.
The two companies have signed a 10-year agreement to form a joint venture that will import and distribute the Modelo stable across the US. The venture will go live from the beginning of next year.
Modelo has a golden goose on its books in the form of the Corona brand. In as consolidated a beer market as the US, imported bottled beer is bucking the trend and performing startlingly well. This category is led by Corona to such an extent that one analyst maintains that “Grupo Modelo is one of the finest operating stories in global beer.”
The joint venture provides a favourable outcome for the Mexican brewer. Modelo has a strong brand but limited operational capability in the US on its own, but can now look forward to additional post-tax profit from the move of around US$150m. At the same time, the two can focus on gaining national scale for Modelo’s brands while making the most of back office synergies.
Everyone’s a winner then, right? Constellation - who previously had held the distribution contract for only the west of the country - certainly seems to think so. “It provides Constellation with a guaranteed profit stream from the western US states for 10 years and, from its position in the joint venture, provides us with potential incremental profits from the growth of the brands in the east,” a spokesperson said last week.
While Modelo is probably the happier of the two, it seems that everyone’s pretty chirpy. Including, I presume, Anheuser-Busch, which owns half of Modelo. However, while I’m certain A-B would have known what was going on before the deal was sealed, could this not be seen as an opportunity missed for the US brewing giant?
Philadelphia’s soda tax came into force on Sunday, and is reportedly causing a stir in the city's check-out aisles....
Earlier this month, I was most-kindly invited by Accolade Wines to visit the Royal Albert Hall in London. The reason? They wanted to see a tennis great in action, and then give them a guided tour thro...
Do you like whisk(e)y? And, I mean, really like whisk(e)y? Are you at a loose end in the first half of 2017? If so, then I've found just the job for you....
Most of the time, changes at the top of a company present themselves in press releases, stock exchange filings or responses from a spokesperson....
- What's coming up in beer in 2017? - Comment
- What's coming up in spirits in 2017? - Comment
- When BRIC markets go horribly wrong
- The just-drinks Analyst - 2017 forecasts
- Chile's winemakers caught out by Brexit "disease"
- A-B InBev acquires Spain's Cervezas La Virgen
- Diageo closes spirits e-commerce portal in UK
- Home entertaining offers drinks opp's - Diageo
- Former Stoli Group CEO joins Perfect Vodka owner
- Diageo mulls United Spirits stake buy - report
- Global vodka insights - market forecasts, product innovation and consumer trends
- The Next Seven Big Beverage Markets
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Global gin insights - market forecasts, product innovation and consumer trends
- Opportunities in Craft Spirits