Ballast Point Continues to Perform For Constellation Brands

Constellation Brands (STZ ) shares reached an all time high after an excellent fourth quarter and raised guidance for 2017. Revenue came in at $1.54 billion, a 14.1% increase year-over-year. Constellation finished the year with $1.4 billion in operating cash flow an increase of 31%.

Constellation has been on a roll recently with acquisitions, after completing its purchase of Meiomi Pinot Noir, one of the best performing wines in the $20 price point range. The company is hoping to continue this success after announcing today the purchase of the Prisoner Wine Company to enhance its fine wine portfolio.

 

 One of the biggest news stories in the beer world in 2015 was when Constellation entered the craft beer industry in 2015 by adding Ballast Point Brewing Companyfor $1 billion, a record-breaking acquisition. Ballast Point added $27 million in revenue for Constellation since the acquisition was completed in Mid December 2015. Ballast Point continues to be one of the fastest-growing major craft beer companies in the country.

 

Ballast Point has experienced a depletion growth rate of 130% in 2016 and sold four million cases — three times that of any major competitor. By comparison, Constellation Brands flagship brand Corona Extra sold 117 Million cases in 2016 and is now the fifth biggest beer brand in the U.S. and the No. 1 imported beer.

From a financial perspective, Ballast Point is considered the strongest craft beer company in the country. Ballast Point continues to grow incredibly fast, while continuing to be an innovative leader within the industry. Ballast Point is constantly churning out new products that are resonating with consumers. The company grew over 100% in 2015. Analysts are starting to pay closer attention to the brand after seeing the results and the growth potential Ballast Point holds.

Ballast Point has some of the best pricing power in the entire beer industry with very healthy margins. The highest end products in the industry are also experiencing the highest growth, Ballast Point and Prisoner wine company both good examples of this trend that Constellation has been capitalizing on.

The combination of the highest price point and highest growth rate make this company very attractive moving forward. Constellation brands appears to be a great fit for Ballast Point and continues to provide opportunity to expand distribution of this exciting brand.

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