Constellation Brands (STZ) Barclays 19th Annual Global Consumer Conference summary

Strategic brand management and growth

• Distinct strategies are being developed for scaling high-growth brands, sustaining mature brands, and innovating with new products, each requiring unique capabilities and playbooks.

• Emphasis is shifting to occasion-led marketing, focusing on consumer need states and winning specific consumption occasions rather than targeting every opportunity.

• Recent activations, such as Pacifico's alignment with adventure and sports occasions, have demonstrated success in connecting brands to relevant consumer moments.

• Corona Extra's turnaround is underway, with early execution focused on targeted spend, new pack sizes, and on-premise activation, leading to improved share trends in key markets.

• Modelo Especial and Pacifico continue to show strong growth, with disciplined expansion strategies balancing distribution and velocity to avoid overextension.

Consumer trends and portfolio positioning

• Consumers are stretched, especially in Florida and Texas, but premium brands continue to show resilience and value perception.

• Pricing architecture is evolving, with repositioning of light beers like Modelo Oro and Corona Premier to better match market demand and testing of lower-priced options like Barrilito.

• The company is refining its revenue growth management and price pack architecture to offer more choices and meet consumer needs at different price points.

Operational transformation and cost management

• The transition from aggressive expansion to operational excellence is nearly complete, with a modernized production footprint providing agility and risk mitigation.

• Over $600 million in cost savings have been achieved in procurement, logistics, and operations, with ongoing annual savings expected.

• Inflationary pressures, especially in logistics and commodities, are expected to impact gross profit margins in the second half of the year, but full-year margin guidance remains intact.

• Continued investment in marketing is planned, with spend adjusted annually based on brand and market needs, and a focus on supporting share gains.