Oisin Foster
If you want to buy shares in Corona beer, you'll need to purchase shares in Constellation Brands, the company that distributes Corona in the US. Constellation Brands is the largest provider of alcoholic beverages in the US, and it generates 80% of its revenue from Mexican beer imports, including Corona and Modelo. You can also buy shares in AB InBev, the multinational conglomerate that owns Corona globally.
| Characteristics | Values |
|---|---|
| Brewer | Constellation Brands, Inc. |
| Stock Ticker | STZ |
| Stock Price | $27.06 |
| Beer Sales | 6% increase in the June-to-August period |
| Revenue | $47 billion |
| Largest Shareholders | Van Damme, de Mevius, and de Spoelberch families (28.6%) |
| Brazilian investment firm 3G Capital (22.7%) | |
| BEVCO Lux Sarl, part of the Santo Domingo Group (5.2%) |
What You'll Learn
AB InBev's acquisition of Corona's parent company, Grupo Modelo
In 2012, Anheuser-Busch InBev (AB InBev) acquired Grupo Modelo, the last major independent Mexican beer producer and Corona maker, for $20.1 billion. The deal gave AB InBev, the world's biggest brewer, dominance in Latin America's second-largest economy and added Corona, the top-selling imported beer in the United States, to its portfolio of brands.
AB InBev, which already owned Budweiser and Stella Artois, had reached an agreement with Modelo's controlling families to buy the half of Modelo it did not already own. The acquisition increased AB InBev's exposure to Mexico's beer market, which was growing at about 3% per year. Grupo Modelo, founded in 1925, was Mexico's biggest brewer with a market share of over 50% in a duopoly with Heineken's FEMSA Cerveza.
The deal was expected to generate annual cost savings of at least $600 million for AB InBev within four years, in addition to a one-time cash flow gain of $500 million. The combined entity would produce about 400 million hectolitres of beer annually, with estimated revenues of $47 billion and 17 billion-dollar brands, including Corona Extra, Modelo Especial, and Victoria.
To fund the all-cash transaction, AB InBev took on $14 billion in new bank loans and planned to reduce its net debt/core profit (EBITDA) ratio to 2.0 times by 2014. The acquisition of Grupo Modelo was part of a series of deals by big brewers looking to expand in growing beer markets and cut costs.
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Constellation Brands' distribution of Corona in the US
Constellation Brands, Inc. is an American producer and marketer of beer, wine, and spirits. It is the largest beer import company in the US, with the third-largest market share (7.4%) of all major beer suppliers. The company has more than 100 brands in its portfolio, including Corona, Modelo Especial, Negra Modelo, Pacífico, and Funky Buddha.
Constellation Brands has two breweries in Mexico that produce Corona and Modelo beer for the US market. Those locations are in Nava, Coahuila, and Ciudad Obregón, Sonora. In 2013, Constellation acquired Grupo Modelo's US beer business from Anheuser-Busch InBev. The transaction included full ownership of Crown Imports LLC, which provided Constellation with complete, independent control of all aspects of the US commercial business. Constellation had formerly imported Corona and other Modelo brands to the United States and acquired the US rights to those brands as part of an anti-trust settlement permitting Modelo's acquisition by Anheuser-Busch InBev. It now produces its own versions of those products for the US, with Modelo serving all other countries.
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Constellation Brands' share price and performance
Constellation Brands Inc. (STZ) is the largest provider of alcoholic beverages in the US, with 80% of its revenue coming from Mexican beer imports under top-selling brands such as Modelo and Corona. The company's share price has fluctuated in recent years, with a 52-week range of $210.15 to $273.65.
In March 2024, the share price rose above $250, and in November 2024, the closing price of a Constellation Brands share was $240.89. The company's market capitalization is $38.55 billion, with 181.54 million shares outstanding.
Constellation Brands has received a consensus rating of "buy" from analysts, with a median target price of $283.69. The company's share price is currently well below the 52-week high of $276, and well above the 52-week low of $224.81.
The company's performance has been mixed in recent years. In January 2024, Constellation Brands lowered its fiscal-year guidance, citing soft sales and expectations of lower profits. However, the company's stock price rose after it reported better-than-expected profit for the third quarter of 2024.
Constellation Brands also owns a 36% stake in Canopy Growth, a medicinal and recreational cannabis producer in Canada, and has a 50/50 joint venture with glass manufacturer Owens-Illinois in Mexico.
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AB InBev's share price and performance
AB InBev, the world's biggest brewer, is the company that owns Corona. In 2012, the Belgium-based brewer bought out Grupo Modelo for $20.1 billion, adding Corona to its portfolio of brands.
AB InBev's share price has fluctuated in recent years, with the company's stock rising and falling in response to various events and market conditions. For example, in 2023, AB InBev's stock was impacted by a boycott of its Bud Light brand following a controversial partnership with transgender influencer Dylan Mulvaney. The boycott resulted in a loss of nearly $30 billion in share value for the company. However, the share price has since recovered, thanks to the success of its other brands and an endorsement from Donald Trump.
As of February 29, 2024, AB InBev's share price was in the range of €49.17 to €62.01 on the Euronext Brussels exchange. The company's market capitalisation was €114.05 billion, with 1.74 billion shares outstanding.
AB InBev's performance has been mixed in recent years. In 2023, the company's revenue and volumes missed consensus estimates, with net profit falling by 33%. However, the company has also made strategic acquisitions and partnerships that have boosted its performance. For example, AB InBev was named an official partner of the Olympic Games in 2024, and it has continued to expand its global presence through acquisitions such as the purchase of Cerveceria Nacional Dominicana for more than $1.2 billion in 2023.
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Corona's sales and popularity in the US
Coronas Sales and Popularity in the US
Corona, the Mexican lager, has been the No. 1 best-selling Mexican and imported beer in the USA since 1988. It was first introduced to the US in 1979 and has been one of the top-selling imports since then. In 2023, it became the biggest imported beer in the country and the fifth-biggest brew overall.
Constellation Brands, the largest provider of alcoholic beverages in the US, owns the exclusive rights to Corona and Modelo in the country. Constellation's Corona sales have been increasing in America, with an increase beginning in 2020. This may be related to the beer's name being similar to the coronavirus. Constellation's stock rose 14% to $216 a share in October 2020.
Corona's branding is based on linking the beer with a relaxed state of mind, often associating it with a calm, tropical, white powder beach in its advertisements. This has allowed it to become the most popular import beer in the United States.
In 2024, Corona took the top spot as the best-selling Super Bowl beer, dethroning Bud Light.
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Frequently asked questions
Corona is owned by a multinational conglomerate, Anheuser-Busch InBev, the world's largest brewer. Constellation Brands distributes Corona in the United States.
To buy shares of Anheuser-Busch InBev, you need a brokerage account. You can open one with a broker or trading platform. Once you have an account, you can place a market order or a limit order. A market order guarantees you buy shares immediately at the market price.
You may want to invest in Corona if you believe that U.S. beer sales will increase and that Corona and other imported beers will continue to dominate the U.S. market. However, you may want to avoid investing if you think alcohol consumption has peaked or that AB InBev is too focused on certain products.
Other beer companies you can invest in include Constellation Brands, which distributes Corona in the U.S., and competitors like Modelo Especial, Budweiser, Stella Artois, and Lowenbrau, which are all owned by AB InBev.
