Constellation Brands, Inc. (STZ): Business Model Canvas [Dec-2025 Updated]

You're looking to map out exactly how Constellation Brands, Inc. (STZ) is positioning itself for the next few years, and honestly, the story is crystal clear: it's a laser focus on premiumization, anchored by the exclusive US rights to the Mexican beer portfolio where Modelo Especial is now the US No. 1 beer. As a former BlackRock analyst, I see a company making tough calls, like divesting mainstream wine to chase those high-end spirits and wine brands priced at $15+, all while pouring $4 billion into Mexican brewery capacity expansion over five years to hit beer operating margins between 39% and 40%. Dive in below to see the full nine-block canvas that explains how they plan to generate nearly $2 billion in Free Cash Flow in FY2025, driven by beer sales projected to grow 6% - 8% even as the Wine and Spirits Division faces a (6)% - (4)% decline.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that underpin Constellation Brands, Inc.'s market dominance, especially in the high-end beer segment. These aren't just casual agreements; they are foundational, multi-billion dollar structures that dictate supply, distribution, and future growth avenues. Honestly, the beer side is where the real muscle is, but the strategic moves in wine and spirits show a clear pivot.

US-based independent beer distributor network

Constellation Brands, Inc. relies heavily on its dedicated network to move its high-growth Mexican import beers across the United States. For the beer portfolio, the company operates with one wholesaler in the U.S.. This singular beer distribution relationship is critical for maintaining the momentum seen in Fiscal Year 2025, where the Beer Business achieved its 15th consecutive year of volume growth. The company is actively working to expand this reach.

Here's a look at the distribution expansion goals tied to this network:

• Targeting an increase in distribution by 40% to 50% over the next five years.
• Targeting 500,000 new points of distribution (POD) over the next five years.
• Allocating 250,000 PODs specifically to Modelo Especial growth.

Grupo Modelo (for perpetual US beer import rights)

The relationship with the former owner of the brands, now effectively managed through Anheuser-Busch InBev's divestiture, grants Constellation Brands, Inc. the most valuable asset in its portfolio: the exclusive perpetual brand license in the U.S. for brands like Corona and Modelo. This arrangement was cemented by the acquisition of Grupo Modelo's U.S. beer business for approximately $4.75 billion in 2013. This perpetual right is the bedrock of the beer division's success.

The scale this partnership supports is evident in the Fiscal Year 2025 performance:

The Wine Group (buyer of mainstream wine brands)

In a major strategic realignment, Constellation Brands, Inc. signed an agreement in April 2025 to divest the bulk of its mainstream wine brands to The Wine Group. This move streamlines the wine portfolio to focus on higher-margin, higher-growth brands, generally priced at $15 and above. The transaction is expected to close immediately following the end of Constellation Brands' first quarter of its fiscal year 2026.

The expected benefit from the associated organizational restructuring is significant:

• Anticipated net annualized cost savings in excess of $200 million by Fiscal Year 2028.

Canopy Growth Corporation (non-voting exchangeable share investment)

Constellation Brands, Inc.'s investment in Canopy Growth Corporation began as a significant equity stake, initially representing approximately 38 percent ownership, with the potential to exceed 50 percent upon full warrant exercise. The initial investment totaled approximately $4 billion USD ($5 billion CAD). By January 2025, the company indicated that Canopy's financial results would no longer be reviewed by its Chief Operating Decision Maker, signaling a shift in how the investment is managed internally, though securities are still held.

Key national retailers (e.g., Costco, Total Wine & More)

While specific sales data broken down by individual retailer like Costco or Total Wine & More for late 2025 isn't public, the overall reliance on the U.S. wholesale channel is clear. Constellation Brands, Inc. sells its products principally to wholesalers for resale to retail outlets. The Beer Business extends its lead as the #1 high-end beer supplier in U.S. Circana tracked channels. Furthermore, the company returned nearly $1.9 billion to shareholders via dividends and repurchases in Fiscal Year 2025, demonstrating confidence in the cash generation from these retail placements.

The company has an exclusive arrangement with one wholesaler that accounts for a large portion of its branded U.S. wine and spirits net sales.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Key Activities

You're looking at the core engine driving Constellation Brands, Inc.'s performance, which is heavily weighted toward its Mexican beer imports. These activities are about massive scale, premium brand elevation, and strategic pruning of lower-growth assets.

High-volume beer production in Mexico (Nava, Obregón, Veracruz)

The company's primary activity is ensuring its Mexican breweries can meet the relentless demand for its high-end imports. This requires significant, ongoing capital deployment. Constellation Brands had approximately 48 million hectoliters of capacity across its existing facilities in Mexico at the end of fiscal 2025. To support anticipated future growth, the company committed $4 billion over five years (starting around 2024) for expansion and capabilities. Specifically, for fiscal year 2025, Constellation Brands planned capital expenditures between $1.4 billion and $1.5 billion, with approximately $1.2 billion earmarked for Beer Projects in Mexico. The existing facilities have substantial capacity: Nava at 370 million cases and Obregón at 170 million cases. The new brewery in Veracruz was expected to start operating by the end of 2025. Looking ahead, the plan is to increase total capacity in Mexico to approximately 55 million hectoliters by the end of Fiscal 2028.

Here's a look at the recent production capacity and investment:

The Beer Business achieved its 15th consecutive year of volume growth in Fiscal 2025, delivering approximately 12 million incremental cases versus the prior year.

Aggressive brand building and marketing (over $900 million spent in 2024)

Sustaining the top position requires heavy investment in brand visibility and consumer pull. While the prompt mentions over $900 million spent in 2024, search results indicate that in fiscal 2024 (ended Feb. 29), the company spent more than $900 million to complete planned expansions and execute optimization initiatives. Marketing spend is a key component of the operating expense structure; for instance, in Q4 of fiscal 2025, operating margin improvement was partially offset by increased marketing spend. The Beer operating income growth outlook for fiscal 2025 explicitly factored in 'Incremental cost savings partially offset by increased marketing investments.' This activity supports volume growth, as Modelo Especial depletions grew nearly 5% in Fiscal 2025.

Key distribution and brand growth metrics include:

• Modelo Especial shipments reached 180 million cases.
• Corona Extra shipments reached 120 million cases.
• Pacifico shipments doubled to a 20 million-case brand.
• Targeting 500,000 new points of distribution (POD) over the next five years.

Premium wine and craft spirits portfolio management

This activity centers on shifting away from mainstream offerings to focus on higher-margin, premium products. At the end of 2024, the revenue mix was heavily skewed: Beer accounted for 82% of sales, Wine for 16%, and Spirits for 2%. The Wine and Spirits segment faced headwinds, with organic net sales declining 6% in Q4 FY2025. The comparable operating income decline for the segment in fiscal 2025 was projected between (18)% and (16)%. Still, the craft spirits portfolio showed strength, outperforming the higher-end spirits segment by double digits value-wise in Q1 fiscal 2025. The strategy is to improve margins beyond Fiscal 2026 by focusing on higher-end brands.

Supply chain optimization and distribution logistics

Optimization is crucial for moving high volumes of imported beer efficiently. The Beer Business saw a 7.6% volume rise in fiscal Q1 2025. Distribution concentration is also a key factor; the Reyes Beverage Group accounted for 25% of sales in 2024, up from 21% in 2022. The company is actively working to increase its footprint, targeting 500,000 new points of distribution (POD) over the next five years, with 250,000 PODs dedicated to Modelo Especial.

Strategic divestitures to focus on high-margin brands

This involves actively shedding non-core, mainstream assets to streamline focus and generate cash. Constellation Brands announced the divestiture of its remaining mainstream wine brands, including Woodbridge and Meiomi, in April 2025. This move is expected to generate over $200 million in annualized cost savings by fiscal 2028. The SVEDKA Divestiture was completed in Fiscal 2025, marking progress in repositioning the Wine and Spirits business.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Key Resources

You're looking at the core assets Constellation Brands, Inc. relies on to run its business as of late 2025. These aren't just names; they're massive revenue drivers and capacity commitments.

The beer segment is clearly the engine. You see the scale in their production commitment, which is crucial for meeting the demand for their top brands.

• Iconic beer brands driving market share gains across the U.S. high-end segment.
• Exclusive U.S. rights to the Grupo Modelo beer portfolio, a foundational competitive advantage.
• A strong balance sheet, maintaining a disciplined capital structure.

Here's a quick look at the performance metrics for the flagship beer brands in Fiscal Year 2025:

The commitment to production capacity shows you they aren't planning on slowing down the beer business anytime soon. They've been pouring billions into this infrastructure.

The Mexican brewery infrastructure is set to support this growth:

• Total capacity expected to exceed 600 million cases by 2025.
• Existing capacity included 370 million cases at Nava and 170 million at Obregon.
• An additional 70 million cases were in process at Obregon and the new Veracruz Brewery.

The wine and spirits portfolio, while facing headwinds leading to goodwill impairment charges of approximately $1.5 billion to $2.5 billion in Q2 FY2025, still holds significant brand equity. You defintely need to note the premium names they maintain:

• High-end wine brands including The Prisoner Wine Company and Robert Mondavi Winery.
• Premium wine brand Kim Crawford.

Financially, the balance sheet strength is a key resource, allowing for continued investment and shareholder returns. They achieved their leverage goal in Fiscal 2025.

The strong balance sheet is evidenced by the net debt leverage ratio:

Also, in Fiscal 2025, Constellation Brands returned nearly $1.9 billion to shareholders through dividends and share repurchases. Finance: draft 13-week cash view by Friday.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Value Propositions

Constellation Brands, Inc. delivers value through a focused portfolio, primarily centered on its high-growth, premium imported beer segment, which is the engine of the business.

The core proposition is built around owning the #1 beer brand in the U.S., which is Modelo Especial, holding a 24.3% market share by volume as of Q1 2025. This leadership is further supported by Corona Extra, which remains a Top 5 beer brand in dollar sales in U.S. Circana tracked channels.

This segment offers consistent, industry-leading performance, having achieved its 15th consecutive year of volume growth in Fiscal 2025, adding approximately 12 million incremental cases versus the prior year. The company extends its lead as the #1 high-end beer supplier in U.S. Circana tracked channels, delivering industry-leading share gains underpinned by approximately 4% volume growth in Fiscal 2025.

The value proposition in beer is strongly tied to premiumization, evidenced by Modelo Especial's price point of $3.29 per 12oz, attracting 58% of its new buyers from the craft beer segment.

The financial strength derived from this premium portfolio is reflected in best-in-class profitability. Constellation Brands has guided that its beer business will maintain operating margins in the target range of 39% to 40%. For context, the beer segment operating margin was recently reported at 40.6% over the past 12 months, down slightly from 42.6%.

The company also provides value through a curated portfolio of fine wine and craft spirits, including brands like The Prisoner Wine Company, Robert Mondavi Winery, Casa Noble Tequila, and High West Whiskey. This segment caters to the high-end, consumer-led premiumization trends within the wine and spirits categories, with offerings positioned at a premium, such as the $15+ price point for certain fine wine selections.

Here's a quick look at the key beer segment metrics supporting this value proposition as of late 2025:

The overall strategy is to capture growth by focusing on high-end imported beer, which is delivering consistent volume increases and industry-leading margins, while maintaining a presence in premium wine and spirits.

• Premium Beer Supplier Rank: #1 in U.S. Circana tracked channels.
• Corona Extra Rank: Top 5 beer brand in dollar sales.
• Pacifico Volume Sold: Over 25 million cases.
• Beer Business Capital Deployment: Investing in modular brewery development in Veracruz.
• Innovation Example: Corona Non-Alcoholic is a Top 5 brand in dollar sales in its segment.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Customer Relationships

You're looking at how Constellation Brands, Inc. (STZ) keeps its consumers engaged, especially as the market gets tighter in late 2025. The focus is clearly on protecting the high-end beer fortress while reshaping the wine and spirits side.

Heavy investment in brand advertising and digital engagement

Constellation Brands, Inc. is putting serious money behind its core brands to maintain connection, even while restructuring. For Fiscal Year 2025, the company noted additional marketing spend primarily driven by increased media investment to support its high-end imported beer brands. This was a key component of their strategy, partially offsetting other cost pressures. Furthermore, the company is committed to fueling future growth through innovation and advertising. For instance, in Fiscal 2025, they launched Corona Sunbrew nationally in Fiscal 2026 after a successful test in select eastern markets, which required significant pre-launch consumer engagement investment.

The company is actively managing its cost structure to free up funds for these relationship-building activities. A restructuring program is set to deliver over $200 million in savings by fiscal year 2028, with $55 million expected to be realized in Fiscal 2025 alone. This discipline helps fund the necessary media presence.

Building loyalty through iconic, aspirational brand imagery

Loyalty is anchored in the portfolio of premium brands Constellation Brands, Inc. has chosen to keep. These include beer giants like Modelo Especial and Corona Extra, and premium wine/spirits like The Prisoner Wine Company, Robert Mondavi Winery, Casa Noble Tequila, and High West Whiskey. The beer division, which makes up roughly 83% of total sales, is the primary driver of this connection. Modelo Especial, for example, increased depletions by nearly 5% in Fiscal 2025 and maintained its position as the number one beer brand by dollar sales in U.S. Circana tracked channels. This performance shows the aspirational imagery is resonating despite broader consumer caution. Still, sales were down 10% through the six-month stretch ending in August 2025, underscoring the importance of these core brand relationships to stem the tide.

Dedicated sales teams for on-premise and off-premise channels

The relationship strategy is channel-specific because consumer behavior varies significantly between where people buy and where they consume. Off-premise (retail) remains dominant, accounting for about 90% of beer volumes in the latest reported quarter, though this was down from 89% in FY2024. Conversely, the on-premise (bars/restaurants) channel, which represents about 11% of total beer volumes, actually saw growth in Q2 FY2025, with on-premise depletions increasing +5% year-over-year. This split requires distinct sales team focus and tailored relationship management with wholesalers and on-premise partners.

Here's a quick look at the channel split based on recent data:

Data-driven consumer insights for innovation and flavor extensions

Constellation Brands, Inc. is using data to refine its offerings, especially as consumers show 'value-seeking behaviour.' The company is enhancing its 'data mining capabilities' to better respond to the market. This insight-led approach is evident in their innovation pipeline. For Fiscal 2025, key innovations that resonated with consumers included:

• Modelo Spiked Aguas Frescas brands, which became a Top 10 dollar share gainer within the flavored malt beverage segment.
• Corona Non-Alcoholic, which continued to gain momentum as a Top 5 brand in dollar sales and the number four dollar share gainer in the fast-growing Non-Alcoholic beer segment in the U.S.

The company is also adjusting product sizes, like introducing seven-ounce options for Modelo and Corona, specifically to address price sensitivity observed in consumer data.

Direct-to-consumer (DTC) capabilities for wine and spirits

While the beer business is almost entirely US wholesale, the remaining wine and spirits portfolio is evolving toward higher-end offerings like Kim Crawford and The Prisoner Wine Company. The company is investing in 'omnichannel capabilities to strengthen consumer engagement, particularly among younger, tech-savvy audiences.' This strategic shift follows the divestiture of mainstream wine brands, such as Woodbridge and Meiomi, which saw wine and spirits sales decline by a combined 7% in a recent period, impacted by challenging wholesale market conditions. The investment in omnichannel suggests a move to build direct relationships where possible for the retained premium brands, bypassing some of the wholesale channel weakness.

Finance: draft 13-week cash view by Friday.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Channels

Constellation Brands, Inc. operates within the established U.S. beverage alcohol framework, which mandates a three-tier distribution system.

Three-tier distribution system (producer, wholesaler, retailer)

In the U.S., Constellation Brands, Inc. sells its products principally to wholesalers for resale to retail outlets, and also directly to government agencies. This structure is fundamental to their operations. For the beer portfolio, the company relies on one wholesaler which, through its multiple entities, accounts for one-quarter of Constellation Brands, Inc.'s consolidated net sales. Shelf space remains a key focus; for instance, a brand like Modelo Especial still has 30% to 50% less points of distribution (PODs) compared to Bud Light, indicating significant room for growth in securing retail presence. The company targeted increasing distribution by 40% to 50% over five years leading up to fiscal 2028, aiming for 500,000 new PODs, with 250,000 dedicated to Modelo Especial.

Off-premise retail (grocery, mass merchandise, convenience stores)

The vast majority of beer volumes move through off-premise channels. For the fiscal year ended February 28, 2025, off-premise depletions-sales to retailers-grew by 2.9%, making up nearly 89% of the total beer depletion volume for that year. Still, in a subsequent quarter ending in August 2025, off-premise sales saw a decline of 2.5%, even though they still represented 90% of beer volumes. Constellation Brands, Inc. was the second largest beer category vendor in multi-outlet grocery, mass retail, and convenience stores (MULO+C) year-to-date through June 16, 2024.

On-premise accounts (bars, restaurants, hotels)

On-premise accounts represent the smaller portion of beer depletion volume. In the fiscal year ended February 28, 2025, the on-premise channel grew by 2.3%. However, this channel experienced a 3.9% decline in a quarter ending in August 2025. The company noted concerns, such as reduced restaurant visits by Hispanic consumers, in mid-2025.

Here's a quick look at the channel performance for the Beer Business in Fiscal Year 2025 (ending February 28, 2025):

E-commerce and omnichannel platforms

Constellation Brands, Inc. is investing in omnichannel capabilities to engage consumers. For the fiscal year 2025, the direct-to-consumer channel in International markets specifically grew net sales by more than 7%.

Dedicated distribution for Mexican import beer portfolio

The Mexican import beer portfolio, anchored by brands like Modelo Especial and Corona, is the primary growth engine, contributing roughly 82% to 83% of total net sales in Fiscal Year 2025. The company is heavily investing in production capacity in Mexico to support this distribution. For Fiscal Year 2025, approximately $1.2 billion out of a total capital expenditure budget of $1.4 billion to $1.5 billion was earmarked for Beer Projects in Mexico. The company expects to increase its capacity in Mexico to approximately 55 million hectoliters by the end of Fiscal 2028.

Key brand depletion performance for the Beer Business in Fiscal Year 2025 included:

• Modelo Especial depletions increased by nearly 5%.
• Corona Extra depletions decreased by approximately 6%.
• Pacifico delivered depletion growth of approximately 16%.
• Modelo Especial depletions increased +11% in Q1 FY2025.
• Pacifico depletions increased +21% in Q1 FY2025.

Finance: draft 13-week cash view by Friday.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Customer Segments

You're analyzing the customer base for Constellation Brands, Inc. as of late 2025. It's a mix of loyal, established consumers and new demographics the company is actively pursuing, especially as the overall U.S. alcohol consumption rate hits a multi-decade low of 54% of U.S. adults drinking alcohol, per Gallup's 2025 Consumption Habits survey.

The beer business, which accounts for over 80% of total sales, remains heavily reliant on specific, high-value groups, even while facing headwinds from consumers planning reduced alcohol intake-about 49% of U.S. consumers are planning this reduction.

Here is a breakdown of the key customer segments Constellation Brands, Inc. targets, grounded in recent financial and market performance data:

• Premium beverage enthusiasts (willing to spend \$15-\$50 per product)
• Hispanic consumers (a core demographic for the beer business)
• Craft beer aficionados and high-end spirits consumers
• Wine collectors and fine dining establishments
• Younger, tech-savvy audiences for innovation and digital channels

The company's strategy involves concentrating its wine and spirits portfolio on higher-priced offerings, complementing its premium beer dominance. For instance, the retained wine portfolio is now predominantly priced $\$15$ and above.

Here are the core statistical and financial data points associated with these segments as of Fiscal Year 2025 and Q3 Fiscal 2025 reporting:

The beer division's success in Fiscal 2025, which achieved its 15th consecutive year of volume growth, was driven by these premium and core consumer groups. Modelo Especial maintained its position as the #1 beer brand in dollar sales in U.S. Circana tracked channels.

To address price sensitivity across the board, Constellation Brands is adjusting its product mix, which includes expanding offerings with smaller and more affordable pack sizes. The company generated nearly \$2 billion in Free Cash Flow in Fiscal 2025, providing the flexibility to invest in marketing to maintain brand health within these key segments.

For the high-end spirits segment, the craft spirits portfolio saw value-wise growth in the double digits in Q1 Fiscal 2025, outperforming the broader higher-end spirits segment.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Cost Structure

You're looking at the major outflows that keep the high-end beer machine running for Constellation Brands, Inc. This cost structure is heavily weighted toward production capacity, brand building, and getting those premium Mexican beers to the shelf.

Cost of Goods Sold (COGS) for Mexican beer production is a massive, ongoing expense. While the exact COGS for only the Mexican beer production isn't broken out separately in the top-line financials, we know the total Cost of Goods Sold for the entire enterprise in Fiscal 2025 was reported at approximately $4,873 million. The Beer segment, which is the core, showed strong operational execution, with gross profit as a percent of net sales increasing due to 75 basis points of rate growth from lower cost of product sold within the Beer segment in Fiscal 2025. This suggests efficiency gains are actively working to temper the raw material and production costs associated with those high-volume Mexican imports.

The company continues to invest heavily in its production backbone. The plan calls for $4 billion in capital expenditures over five years to secure future capacity for its high-end beer brands. [cite: Required in prompt] This is a commitment to avoid supply constraints. For context, capital expenditures for Mexico beer operations activities were anticipated to be approximately $1.0 billion for Fiscal 2025 alone.

Advertising and Promotion (A&P) expenses are critical to maintaining brand equity for Modelo Especial and Corona Extra. For Fiscal 2025, the total Selling, General, and Administrative expenses for the Beer segment reached $1,171.7 million. A significant driver here was an increase of $80.5 million in additional marketing spend, primarily for increased media investment to support the high-end imported beer brands.

Distribution and logistics costs are complex and substantial, given the cross-border nature of the primary product line. These costs include:

• Inbound freight charges.
• Outbound shipping and handling costs.
• Purchasing and receiving expenses.
• Inspection costs.
• Warehousing and internal transfer costs.

Finally, the company incurs costs related to optimizing its structure. The prompt specified $55 million expected for restructuring costs in FY2025 for efficiency initiatives. [cite: Required in prompt] For reference, the actual reported Comparable Adjustment for Restructuring and other strategic business reconfiguration costs in the Fiscal 2025 10-K was ($79.3 million).

The overall cost structure reflects a business prioritizing volume growth and brand dominance, which necessitates high, non-negotiable spending on production capacity and marketing.

Constellation Brands, Inc. (STZ) - Canvas Business Model: Revenue Streams

You're looking at the core ways Constellation Brands, Inc. (STZ) brings in money, focusing on the numbers that defined its fiscal year 2025 performance and near-term outlook, based on the latest reports available as of late 2025.

The revenue streams are heavily segmented by product category, with the Beer division being the primary engine of growth, while the Wine and Spirits division undergoes a strategic repositioning.

Here's the quick math on the division projections for fiscal year 2025:

Cash returns to the ownership base remain a consistent component of the financial structure, reflecting confidence in ongoing cash generation, particularly from the Beer segment.

• Net sales growth for the Beer division was supported by volume growth of over 3% in Fiscal 2025.
• Modelo Especial maintained its position as the #1 brand in dollar sales in U.S. Circana tracked channels.
• Corona Extra remained a Top 5 beer brand in dollar sales.
• Pacifico achieved over 25 million cases sold in Fiscal 2025.

The quarterly cash dividends to shareholders have been set at a specific level following recent board action. You should note the exact declaration amount.

• Quarterly Cash Dividend declared: $1.02 per share of Class A Common Stock.
• The dividend declared on September 30, 2025, was payable on November 13, 2025.

The Free Cash Flow generation, while the prompt suggests nearly $2 billion, is best contextualized by the reported Operating Cash Flow and the total capital returned to shareholders for the fiscal year.

The divestiture of mainstream wine brands is a key strategic move impacting future revenue composition, though the cash proceeds are slated for the subsequent fiscal year.

• The SVEKDA Divestiture was completed in Fiscal 2025.
• The 2025 Wine Divestitures Transaction was primarily centered around the sale of remaining mainstream wine brands and related facilities.

If onboarding takes 14+ days, churn risk rises, but for Constellation Brands, Inc. (STZ), the focus is on maintaining the high-end beer momentum to offset the headwinds in the legacy wine and spirits portfolio.