Constellation Brands, Inc. (STZ - Free Report) has acquired Funky Buddha Brewery, a leading craft brewery in Florida, in order to strengthen its position in the high-end beer segment in the U.S. The acquired brewery will form part of Constellation Brands’ Craft & Specialty Beer group in the beer division. However, the terms of the deal remained under covers.
Founded in 2010 in Boca Raton, this fastest-growing craft brewery in Florida makes exclusive craft beer with high quality ingredients. Further, it has some of the most popular brands in its portfolio including Hop Gun IPA and Floridian Hefeweizen. Located in the heart of Oakland Park’s burgeoning Culinary Arts District, this 54,000 square feet brewery with a capacity of 45,000 BBLs is South Florida’s largest craft microbrewery in terms of size and volume. Moreover, it is Florida’s busiest tap room with regard to beer sales.
Following the acquisition, Constellation Brands and the Funky Buddha’s team will work together, with brewery owners Ryan and KC Sentz carrying out daily operations. Further, Funky Buddha will retain its standard of brewing, continue to serve its loyal beer customers in the same culinary-style.
As for Constellation Brands, the addition of a local brand like Funky Buddha to its existing portfolio, which includes the Ballast Point, is likely to aid in executing the strategy to preserve its leadership in the high-end craft beer segment. The company believes that the combination of its market reach in the beer industry, distribution partnerships, consumer insights and craft expertise from the Ballast Point, with the bold culture created by the Sentz family, will help nurture and develop Funky Buddha’s unique brand.
As one of the world’s largest wine companies, Constellation Brands holds a dominant position in the premium wine and beer segment in the U.S. and is also a leading producer of wine in Canada and New Zealand. Besides, its focus on expanding operations to achieve business growth is evidently noteworthy from the recent buyouts. Additionally, the acquisition of Obregon Brewery is likely to bolster its high-end Mexican beer portfolio, going forward.
Constellation Brands, which shares space with Ambev S.A. (ABEV - Free Report) and Anheuser-Busch InBev SA/NV (BUD - Free Report) , remains on track to expand in the craft beer space. Notably, its first quarter of fiscal 2018 earnings marked the 11th consecutive beat and 16th straight quarter of year-over-year improvement. This Zacks Rank #2 (Buy) stock has rallied 25.2% in the last six months, outperforming the industry’s growth of 10.4%. Currently, the industry is placed in the top 14% of the Zacks classified industries (36 out of 256). Also, the company’s shares have outpaced the broader Consumer Staples sector, having gained 7.3%. The sector is placed in the top 31% of the Zacks classified sectors (5 out of 16).
Stock You May Consider
Another top-ranked stock in the same industry is The Boston Beer Company, Inc. (SAM - Free Report) with an average positive earnings surprise of 50% in the last four quarters. The company boasts the same rank as Constellation Brands. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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