Below is a chart and brief excerpt from today's Early Look written by Consumables analyst Daniel Biolsi.
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One of our investment themes in consumer staples is the easy or difficult year over year comparisons of the pandemic – separating the one-time winners, secular winners, structural losers, and losers that will see a reversal with a vaccine. Constellation Brands (STZ) is a best idea long, because it is a structural share gainer in beer. It owns the Corona and Modelo beer brands in the U.S. as well as a wine and spirits portfolio. Sales accelerated at the outset of the pandemic despite one of its main brands sharing the name Corona with the virus. If I can share just one chart it would be the Chart of The Day, that shows the demographics underpinning its growth. When the Mexican government shut beer production for nearly three months, Constellation Brands went from being nearly unaffected during the pandemic to becoming a temporary loser. Now the company’s sales growth is accelerating with improving inventory levels. Our conversations with the distributors confirm the supply improvement. We can see the month over month improvement in the point of sales data as well. As people return to restaurants, bars, and events in 2021 we’ll see recovery there as well. |
