VOL. XCIV, NO. 247
★ MOAT STOCKS & COMPETITIVE ADVANTAGES ★
PRICE: 5 CENTS
Tuesday, December 23, 2025
Constellation Brands, Inc.
STZ · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Constellation Brands is a beverage alcohol company whose economics are dominated by its U.S. Beer business (Modelo, Corona, Pacifico, Victoria) sold through the U.S. three-tier system. The Beer segment moat is strongest: exclusive/perpetual U.S. brand rights for key Mexican beer brands plus large-scale Mexico brewery capacity investments that support supply reliability and unit economics. The smaller Wine & Spirits segment is being repositioned toward higher-end brands, with meaningful dependence on consolidated U.S. distribution (Southern Glazer's Wine and Spirits). Overall risks include category trade-downs, regulatory/distribution changes, and execution risk on Mexico capacity builds.
Primary segment
Beer
Market structure
Oligopoly
Market share
—
HHI: —
Coverage
2 segments · 5 tags
Updated 2025-12-23
Segments
Beer
U.S. high-end beer (imported beer + above-premium American beer)
Revenue
83.7%
Structure
Oligopoly
Pricing
strong
Share
—
Peers
Wine and Spirits
U.S. higher-end wine and spirits (with DTC and select international sales)
Revenue
16.4%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
Beer
U.S. high-end beer (imported beer + above-premium American beer)
FY2025 Beer net sales $8.54B (of $10.21B total) and comparable operating margin 39.7%. Operating_profit_share derived from FY2025 comparable operating income for Beer ($3,394.4m) and Wine & Spirits ($325.1m), excluding Corporate Operations and Other. Customer concentration: Reyes Beer Division entities represented 25.4% of FY2025 net sales.
Contractual Exclusivity
Legal
Contractual Exclusivity
Strength: 5/5 · Durability: durable · Confidence: 4/5 · 3 evidence
Exclusive U.S. rights (all 50 states) to import/market/sell key Mexican beer brands; perpetual trademark sublicense supports long-lived exclusivity.
Erosion risks
- Adverse court rulings or contract interpretation disputes
- Regulatory or antitrust changes affecting distribution/brand rights
- Consumer demand shift away from Mexican imports/high-end beer
Leading indicators
- Material litigation updates related to brand rights
- Disclosure of changes to license/sublicense terms
- High-end beer dollar/volume share trends (Circana/Nielsen or company disclosures)
Counterarguments
- Exclusivity does not prevent share loss if consumers trade down or switch categories
- Competitors can build/market alternative import brands and capture shelf space
Brand Trust
Demand
Brand Trust
Strength: 5/5 · Durability: durable · Confidence: 4/5 · 3 evidence
Portfolio includes leading imported/high-end brands; company reports Modelo Especial as the #1 beer brand in U.S. dollar sales and cites multiple top share-gaining brands.
Erosion risks
- Brand dilution from over-extension or failed innovation
- Reputation or quality incidents
- Private label/value offerings during downturns
Leading indicators
- Brand-level depletion/shipments growth vs category
- Advertising spend efficiency and brand health metrics
- Price/mix and promotional intensity
Counterarguments
- Beer category can be promotion-sensitive; loyalty may weaken in a trade-down cycle
- Competitors can outspend on marketing or win distribution resets
Distribution Control
Supply
Distribution Control
Strength: 2/5 · Durability: medium · Confidence: 3/5 · 2 evidence
U.S. beer route-to-market relies on large independent wholesalers; concentrated relationships with major distributors can improve execution and shelf availability for top brands.
Erosion risks
- Distributor consolidation increases buyer power
- Distributor performance issues in key territories
- Retailer consolidation and private label pressure
Leading indicators
- Changes in top-customer concentration (net sales %)
- Distributor fill rates and out-of-stock incidence
- Distributor portfolio share and prioritization of brands
Counterarguments
- Large distributors carry competing portfolios; relationships are not exclusive
- Brand demand typically drives distributor focus (distribution is a consequence, not a cause)
Capacity Moat
Supply
Capacity Moat
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Large, multi-year Mexico brewery build/expansion program raises capacity and can lower per-unit costs; difficult and time-consuming for rivals to replicate at similar scale for the U.S. import channel.
Erosion risks
- Overcapacity if demand slows (margin pressure)
- Execution risk on new brewery projects (cost overruns, delays)
- Water/energy constraints and environmental permitting
Leading indicators
- Mexico brewery project milestones and capex vs plan
- Beer segment operating margin trend
- Service levels/out-of-stocks/distributor fill rates
Counterarguments
- Scale helps, but consumers buy brands; capacity without demand does not create pricing power
- Rivals can contract brew or import to compete without building equivalent capacity
Wine and Spirits
U.S. higher-end wine and spirits (with DTC and select international sales)
FY2025 Wine & Spirits net sales $1.67B and comparable operating margin 19.5%. Operating_profit_share derived from FY2025 comparable operating income for Beer ($3,394.4m) and Wine & Spirits ($325.1m), excluding Corporate Operations and Other. DTC channel represented 16% of total Wine & Spirits net sales in FY2025. Customer concentration: Southern Glazer's Wine and Spirits represented 11.2% of FY2025 net sales; company also discloses a distribution arrangement with SGWS representing ~60% of U.S. branded wine & spirits volume.
Brand Trust
Demand
Brand Trust
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 3 evidence
Portfolio repositioned toward higher-end wines and select spirits with multiple well-known brands; company reports having multiple top-selling higher-end wine brands in the U.S.
Erosion risks
- Shifts in consumer preference away from wine
- Distributor destocking and reduced shelf focus for wine
- Competitive intensity in premium spirits and wine
Leading indicators
- DTC mix and growth
- Brand-level shipment/depletion trends for key labels
- Gross margin and promotional intensity
Counterarguments
- Wine is fragmented; brand power is often weaker than in beer/spirits
- Premium wine buyers may switch across regions/vintages with limited switching cost
Distribution Control
Supply
Distribution Control
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 2 evidence
Consolidated U.S. distribution partnership can improve execution and shelf access; company reports SGWS represents the majority of U.S. branded wine & spirits volume.
Erosion risks
- Distributor relationship deterioration or renegotiation
- Retail consolidation increases buyer power
- Route-to-market benefits are non-exclusive and can be matched
Leading indicators
- Changes in disclosed distributor arrangements
- Share of volume routed through SGWS vs other partners
- On-premise recovery and retail shelf resets
Counterarguments
- Large distributors also represent competing suppliers; access is not exclusive
- Execution advantage may be outweighed by category decline and fragmentation
Evidence
We have the exclusive right to import, market, and sell our Mexican beer brands in all 50 states of the U.S.
Supports exclusivity of U.S. brand rights for the Beer segment.
This sub-license agreement is perpetual.
Perpetual trademark sublicense reinforces durability of brand rights.
A U.S. appeals court has upheld a jury verdict in favor of Constellation Brands.
Illustrates enforceability of brand/contract rights in disputes (supports confidence, not a guarantee).
We are also the second-largest beer company and have the #1 beer brand, Modelo Especial, in dollar sales in the U.S.
Supports brand leadership positioning that underpins demand-side moat.
Modelo Especial was the best-selling beer overall.
Reinforces strength of flagship brand within the broader beer category.
Showing 5 of 15 sources.
Risks & Indicators
Erosion risks
- Adverse court rulings or contract interpretation disputes
- Regulatory or antitrust changes affecting distribution/brand rights
- Consumer demand shift away from Mexican imports/high-end beer
- Brand dilution from over-extension or failed innovation
- Reputation or quality incidents
- Private label/value offerings during downturns
Leading indicators
- Material litigation updates related to brand rights
- Disclosure of changes to license/sublicense terms
- High-end beer dollar/volume share trends (Circana/Nielsen or company disclosures)
- Brand-level depletion/shipments growth vs category
- Advertising spend efficiency and brand health metrics
- Price/mix and promotional intensity
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
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