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Will Constellation Brands' Focus on Core Brands Deliver in 2025?
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Key Takeaways
STZ's beer business, nearly 83% of sales, is expected to grow 0-3% in fiscal 2026.
A multi-year plan aims to revive wine and spirits with high-end offerings and better margins.
STZ plans to drive growth through brand-building, innovation, premiumization and cost savings.
Constellation Brands, Inc. (STZ - Free Report) is a powerhouse in the alcoholic beverage industry, with balanced presence across beer, wine and spirits. The company continues to prioritize premiumization, brand strength and portfolio optimization as a central theme of its growth strategy. Armed with a portfolio of consumer-led, top-notch brands such as Modelo Especial, Corona Extra, Pacifico, Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company, High West, Casa Noble and Mi CAMPO, STZ is poised well to serve the evolving tastes of consumers.
STZ is sharpening its focus on high-performing core brands in high-margin categories, particularly beer, which makes up roughly 83% of total sales. STZ is capitalizing on favorable U.S. beer trends, especially the rising demand for Mexican imports and premium offerings. Modelo, now the top-selling beer in the US, continues to be a standout performer. Corona and Pacifico are the other beer brands that are performing well. For fiscal 2026, the company anticipates sales growth of 0–3% for the beer segment.
In the wine and spirits business, the portfolio continues to evolve toward higher-end offerings, with premium brands like The Prisoner, Kim Crawford and Meiomi driving growth. The company is investing in innovation, flavor extensions and omnichannel capabilities to strengthen consumer engagement, particularly among younger, tech-savvy audiences. Additionally, STZ is divesting lower-performing assets and streamlining operations to drive margin expansion and enhance long-term value.
While near-term challenges like inflation and channel shifts persist, Constellation Brands’ disciplined focus on fewer, stronger brands and strategic execution provides a solid foundation for sustainable growth in 2025 and beyond.
Brand Playbooks: Comparing STZ With BUD, SAM & TAP
As Constellation Brands doubles down on its core portfolio strategy, a closer look at how peers like Anheuser-Busch InBev SA/NV (BUD - Free Report) , The Boston Beer Company, Inc. (SAM - Free Report) and Molson Coors Beverage Company (TAP - Free Report) manage their core brand playbooks offers key insights into competitive positioning and evolving industry dynamics.
Anheuser-Busch InBev SA/NV, alias AB InBev, has been gaining from continued consumer demand for its brand portfolio. The company’s premiumization strategy is a key growth lever. AB InBev has been focused on premium beer offerings, aligning with consumer preferences in the alcohol industry. Among the above-core brands, Corona has been leading the performance, delivering low-teens revenue growth outside of Mexico. BUD has been focused on expanding its Beyond Beer portfolio as well.
Boston Beer remains focused on product innovations and brand development to strengthen its market position and drive operational performance. Among the most iconic brands in American craft brewing, Samuel Adams is the keystone of Boston Beer. The company has diversified its lineup with beverages like Truly Hard Seltzer and has grown beyond traditional beer. SAM’s diversification strategy centers on expanding its “Beyond Beer” portfolio, including hard seltzers, ciders and other alternative alcoholic beverages, to capitalize on the evolving consumer taste, reducing reliance on the traditional beer segment.
Molson Coors remains committed to bolstering growth through innovation and premiumization. To accelerate portfolio premiumization, the company has been aggressively growing its above-premium portfolio. It remains focused on stabilizing its larger above-premium brands in the US, while simultaneously pursuing meaningful growth opportunities for its most strategic, high-performing brands. The company intends to invest in iconic brands and growth opportunities in the above-premium beer space and expand in adjacencies and beyond beer.
STZ’s Price Performance, Valuation & Estimates
Shares of Constellation Brands have lost 25.9% year to date against the industry’s growth of 2.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, STZ trades at a forward price-to-earnings ratio of 12.34X compared with the industry’s average of 15.23X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STZ’s fiscal 2026 earnings implies a year-over-year decline of 7.9%, while that for fiscal 2027 indicates growth of 8.5%. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has moved down in the past 30 days.
Image: Bigstock
Will Constellation Brands' Focus on Core Brands Deliver in 2025?
Key Takeaways
Constellation Brands, Inc. (STZ - Free Report) is a powerhouse in the alcoholic beverage industry, with balanced presence across beer, wine and spirits. The company continues to prioritize premiumization, brand strength and portfolio optimization as a central theme of its growth strategy. Armed with a portfolio of consumer-led, top-notch brands such as Modelo Especial, Corona Extra, Pacifico, Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company, High West, Casa Noble and Mi CAMPO, STZ is poised well to serve the evolving tastes of consumers.
STZ is sharpening its focus on high-performing core brands in high-margin categories, particularly beer, which makes up roughly 83% of total sales. STZ is capitalizing on favorable U.S. beer trends, especially the rising demand for Mexican imports and premium offerings. Modelo, now the top-selling beer in the US, continues to be a standout performer. Corona and Pacifico are the other beer brands that are performing well. For fiscal 2026, the company anticipates sales growth of 0–3% for the beer segment.
In the wine and spirits business, the portfolio continues to evolve toward higher-end offerings, with premium brands like The Prisoner, Kim Crawford and Meiomi driving growth. The company is investing in innovation, flavor extensions and omnichannel capabilities to strengthen consumer engagement, particularly among younger, tech-savvy audiences. Additionally, STZ is divesting lower-performing assets and streamlining operations to drive margin expansion and enhance long-term value.
While near-term challenges like inflation and channel shifts persist, Constellation Brands’ disciplined focus on fewer, stronger brands and strategic execution provides a solid foundation for sustainable growth in 2025 and beyond.
Brand Playbooks: Comparing STZ With BUD, SAM & TAP
As Constellation Brands doubles down on its core portfolio strategy, a closer look at how peers like Anheuser-Busch InBev SA/NV (BUD - Free Report) , The Boston Beer Company, Inc. (SAM - Free Report) and Molson Coors Beverage Company (TAP - Free Report) manage their core brand playbooks offers key insights into competitive positioning and evolving industry dynamics.
Anheuser-Busch InBev SA/NV, alias AB InBev, has been gaining from continued consumer demand for its brand portfolio. The company’s premiumization strategy is a key growth lever. AB InBev has been focused on premium beer offerings, aligning with consumer preferences in the alcohol industry. Among the above-core brands, Corona has been leading the performance, delivering low-teens revenue growth outside of Mexico. BUD has been focused on expanding its Beyond Beer portfolio as well.
Boston Beer remains focused on product innovations and brand development to strengthen its market position and drive operational performance. Among the most iconic brands in American craft brewing, Samuel Adams is the keystone of Boston Beer. The company has diversified its lineup with beverages like Truly Hard Seltzer and has grown beyond traditional beer. SAM’s diversification strategy centers on expanding its “Beyond Beer” portfolio, including hard seltzers, ciders and other alternative alcoholic beverages, to capitalize on the evolving consumer taste, reducing reliance on the traditional beer segment.
Molson Coors remains committed to bolstering growth through innovation and premiumization. To accelerate portfolio premiumization, the company has been aggressively growing its above-premium portfolio. It remains focused on stabilizing its larger above-premium brands in the US, while simultaneously pursuing meaningful growth opportunities for its most strategic, high-performing brands. The company intends to invest in iconic brands and growth opportunities in the above-premium beer space and expand in adjacencies and beyond beer.
STZ’s Price Performance, Valuation & Estimates
Shares of Constellation Brands have lost 25.9% year to date against the industry’s growth of 2.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, STZ trades at a forward price-to-earnings ratio of 12.34X compared with the industry’s average of 15.23X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STZ’s fiscal 2026 earnings implies a year-over-year decline of 7.9%, while that for fiscal 2027 indicates growth of 8.5%. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has moved down in the past 30 days.
Image Source: Zacks Investment Research
Constellation Brands stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.