{"id":35518,"date":"2025-03-20T23:56:00","date_gmt":"2025-03-20T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=35518"},"modified":"2025-03-21T10:36:25","modified_gmt":"2025-03-21T02:36:25","slug":"constellation-brands","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/","title":{"rendered":"How Buffett&#8217;s new stake in Constellation Brands make money?"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Company_Profile\" >Company Profile<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Introduction\" >Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Initial_Public_Offering\" >Initial Public Offering<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Famous_Investors\" >Famous Investors<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Constellations_Business\" >Constellation&#8217;s Business<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Business_Scope\" >Business Scope<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#The_companys_advantageous_position\" >The company&#8217;s advantageous position<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Brands_owned_by_the_company\" >Brands owned by the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Acquired_American_Modelo\" >Acquired American Modelo<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Marijuana_for_medical_use\" >Marijuana for medical use<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Operating_Performance\" >Operating Performance<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#2024_third_quarter_financial_report\" >2024 third quarter financial report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Spending_tightening\" >Spending tightening<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Tariff_uncertainty\" >Tariff uncertainty<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Capital_market_performance\" >Capital market performance<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Stock_price_performance\" >Stock price performance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Market_Valuation\" >Market Valuation<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Company_Profile\"><\/span>Company Profile<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.cbrands.com\/\" target=\"_blank\" rel=\"noopener\">Constellation Brands (ticker: STZ) <\/a>was founded in 1945 by Marvin Sands in the Finger Lakes region of New York as Canandaigua Industries. In 2000, the company changed its name to its current name.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Initial_Public_Offering\"><\/span>Initial Public Offering<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Constellation Brands&#8217; predecessor was Canandaigua Wine Company, Inc., which went public in 1973.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Famous_Investors\"><\/span>Famous Investors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Berkshire purchased new shares of Constellation Brands in the fourth quarter of 2024. In total, Berkshire purchased more than 5.6 million shares of Constellation, and by the end of 2024, the position was worth approximately $1.24 billion.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Constellations_Business\"><\/span>Constellation&#8217;s Business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Business_Scope\"><\/span>Business Scope<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Constellation is an American beer, wine, and spirits producer and marketer. It is the largest beer importer in the United States by sales and the third largest (7.4%) of all major beer suppliers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_companys_advantageous_position\"><\/span>The company&#8217;s advantageous position<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.cbrands.com\/\" target=\"_blank\" rel=\"noopener\">Constellation Brands <\/a>owns seven of the top 100 best-selling premium wine brands in the U.S., including Meiomi and Kim Crawford in the top ten.<\/p>\n\n\n\n<p>The industry is increasingly moving towards high-end brands. Since 2012, U.S. revenue from premium beer brands has grown from 33% to more than 60%, and Constellation saw this opportunity early on and positioned itself to benefit from it. The company&#8217;s brands contribute the majority of premium growth across the industry.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Brands_owned_by_the_company\"><\/span>Brands owned by the company<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Constellation owns more than 100 brands, including three categories:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Wine brands include Robert Mondavi, Kim Crawford, Meiomi, Simi Winery, Ruffino and The Prisoner Wine Company.<\/li>\n\n\n\n<li>The beer portfolio includes imported brands such as Corona, Modelo Especial, Negra Modelo and Pac\u00edfico, for which it has U.S. rights, as well as American craft beer producer Funky Buddha.<\/li>\n\n\n\n<li>Spirits brands include Casa Noble Tequila and High West Whisky, Nelson&#8217;s Green Brier Tennessee Whiskey.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Acquired_American_Modelo\"><\/span>Acquired American Modelo<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Since its establishment, Constellation Brands has carried out numerous mergers and acquisitions of various sizes. The most important of these was in <a href=\"https:\/\/www.justice.gov\/archives\/opa\/pr\/justice-department-reaches-settlement-anheuser-busch-inbev-and-grupo-modelo-beer-case\" target=\"_blank\" rel=\"noopener\">2013, when Constellation acquired Modelo&#8217;s U.S. beer business from Anheuser-Busch InBev (AB InBev, ticker: BUD). As part of the antitrust agreement, Anheuser-Busch InBev was required to divest the business and allow Anheuser-Busch InBev to acquire Modelo<\/a>.<\/p>\n\n\n\n<p>Constellation previously imported Corona and other Modelo-branded products into the United States. The transaction includes full ownership of Crown Imports LLC. With this transaction, Constellation secured below rights:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Complete and independent control over all aspects of U.S. commercial operations.<\/li>\n\n\n\n<li>Brewery in Mexico.<\/li>\n\n\n\n<li>Received an exclusive perpetual brand license in the United States to import, market and sell Corona and Modelo branded products.<\/li>\n\n\n\n<li>And are free to develop brand extensions and innovations for the U.S. market.<\/li>\n<\/ul>\n\n\n\n<p>Currently, Constellation manufactures these products in Mexico for the U.S. market. The original Modelo Group provides services to all other countries, excluding the United States.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Marijuana_for_medical_use\"><\/span>Marijuana for medical use<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 2017, the company began investing in medical marijuana by acquiring a 9.9% stake in Canopy Growth Corporation, one of Canada&#8217;s largest sellers of medical marijuana products.<\/p>\n\n\n\n<p>However, Constellation Brands&#8217; investment in Canopy did not yield the expected profit; the company hinted that it might exit the cannabis business in the future.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Operating_Performance\"><\/span>Operating Performance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2024_third_quarter_financial_report\"><\/span>2024 third quarter financial report<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The company reported solid third-quarter sales of $2.4 billion, with net income up 21% year over year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spending_tightening\"><\/span>Spending tightening<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The weak consumer spending environment has forced top brands to cut prices to drive demand. Investing in top consumer brands is often a good choice when the overall economy is weak. Eventually, consumer spending picked up again. Investors who bought top stocks at low prices have been handsomely rewarded in the economic recovery.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tariff_uncertainty\"><\/span>Tariff uncertainty<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Additionally, tariffs on Mexican imports set to take effect April 2 add uncertainty to near-term demand trends. Still, Constellation&#8217;s beer business grew faster than the industry average in the third quarter, reflecting its strong brand strength.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capital_market_performance\"><\/span>Capital market performance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Stock_price_performance\"><\/span>Stock price performance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Constellation Brands&#8217; stock price plummeted in early 2025 after releasing its third-quarter earnings report ending November 2024, and the stock price has fallen about 16% so far in 2025; creating an attractive buying opportunity for interested and patient investors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Market_Valuation\"><\/span>Market Valuation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Constellation Brands currently trades at 13 times this year&#8217;s consensus earnings estimate, which is a steal. Furthermore, the company pays out over 40% of its free cash flow in the form of dividends, giving it an above-average forward yield of 2.19%.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"60\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2025\/03\/Constellation_Brands.png\" alt=\"Constellation Brands\" class=\"wp-image-35519\"\/><figcaption class=\"wp-element-caption\">credit:wiki<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/20\/constellation-brands\/\">How Buffett&#8217;s new stake in Constellation Brands make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/05\/11\/monster-beverages-monster-level-stock-returns\/\">Monster Beverage&#8217;s monster level stock returns<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/08\/21\/celsius-energy-drink\/\" target=\"_blank\" rel=\"noreferrer noopener\">Celsius, upstart of energy drink company<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/05\/15\/wingstops-astonishing\/\" target=\"_blank\" rel=\"noreferrer noopener\">Wingstop&#8217;s astonishing growth is unprecedented in the restaurant industry<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/26\/how-mcdonalds-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does McDonald&#8217;s, the world&#8217;s largest fast food leader, make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/02\/coca-cola-has-been-inferior-to-pepsi-in-and-even-return-rate-is-negative-in-past-10-years\/\" target=\"_blank\" rel=\"noreferrer noopener\">Coca-Cola has been inferior to Pepsi in and even return rate is negative in past 10 years!<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/22\/pros-and-cons-of-coca-cola\/\" target=\"_blank\" rel=\"noreferrer noopener\">Pros and cons of investing in Coca-Cola<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/12\/how-does-dominos-make-money\/\">How does Domino&#8217;s make money? its stock reward beat down Alphabet<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/09\/22\/how-yum-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does ubiquitous Yum! Brands make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/11\/starbucks-predicament\/\">How does Starbucks make money? and the current predicament<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/16\/civilian-production\/\" target=\"_blank\" rel=\"noreferrer noopener\">Discover the possibility of super growth stocks in the civilian production industry<\/a>&#8221; <\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Constellation Brands owns seven of the top 100 best-selling premium wine brands in the U.S., including Meiomi and Kim Crawford in the top ten.<\/p>\n","protected":false},"author":1,"featured_media":35519,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[985,11],"tags":[500,984],"class_list":["post-35518","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-beverage","category-buffett","tag-bud","tag-stz"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/35518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=35518"}],"version-history":[{"count":14,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/35518\/revisions"}],"predecessor-version":[{"id":35551,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/35518\/revisions\/35551"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/35519"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=35518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=35518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=35518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}