This is What Happens When You Invest Billions of Dollars

Let’s be honest here for a second.

Before the whole BILLION dollar buy of Ballast Point, did you know about Constellation Brands? Maybe you’re a wine lover. Maybe you’re from Upstate NY, like me. (shoutout to Victor, NY!) Maybe you read this piece I wrote in April of last year.

While supporting some of the hottest beer brands in the market, Constellation remained a relative unknown to beer enthusiasts until that whole $1 billion thing.

But here we are, just three months out from that B-word bomb, and many people freaking out about it.

And then really freaking out.

Screen Shot 2016-02-25 at 7.17.15 AM

and then not freaking out.

Because let’s stick to this honesty thing. Constellation is running a business – and a highly successful one at that. Just a month ago, the company announced record-setting share prices with beer sales soaring to end 2015.

So of course they’re going to start protecting their investments, all the while making even more.

Please don’t freak out.

This week, Harry Schuhmacher at Beer Business Daily posed this question: “Are we seeing the new face of Constellation Brands?”

It’s a very reasonable question to ask, as the company has shuffled administration as they place greater emphasis on the beer side of the business. What seems to be the next bit of gasoline to throw on beer enthusiast fiery rage comes from efforts to also focus on distribution of their products “to better reflect changes to our beer portfolio as it has evolved over the years and to adapt to changing market conditions,” per Harry’s story.

There are all sorts of acronyms and new “Gold Network Standards” and business jargon you’re welcome to head over and read (and I encourage it), but the gist seems to be this: Constellation is spending a lot of money to secure a strong financial future and now they’re putting policies in place to better reflect that.(Read: “incentive”-like programs?) They want greater oversight, greater education and greater “tactical funding requirements” when it comes to distribution. (what?) Basically, they drop every buzzword except “synergy.”

It just so happens that the intents of these policies are most certainly not #IndieBeer and I wonder if it’ll just get more beer drinkers in a tizzy over a company they couldn’t care less about a few months ago.

But, thank you, Harry, for putting it into context:

I don’t think it’s a coincidence that Constellation is taking a harder and more aggressive stand with their distributors on the eve of the date when Anheuser-Busch can legally get more aggressive with their own distributors who carry Constellation Brands. It seems to me that Constellation is using their offense as their best defense. It’s no secret A-B has their plans on the Mexican beer market as they seek to “disrupt it” in any way they can.

Let’s not forget all the other efforts Constellation is taking on, either.

Last summer, it was a $2 billion investment to expand a plant. Then last month it was $1.5 billion to build a new brewery all together. But again, context.

Constellation is on a roll. And it’s on a roll at a time when AB InBev is working on taking over SABMiller. And when distributing beer is becoming more pivotal (and complicated) to success. And, most important, when people want to buy their brands.

It’s a lot of fun watching the beer industry, with 4,100+ breweries and growing. It’s just that so much of our attention is spent focused on the small operations, the upstarts and the local success stories. Rightfully so. But all those tales start from the same place that Constellation is working from now. It’s a business.

(Someone screams at me, “But the small guys are doing it for the love of beeeeeeer!“)

So of course changes are coming for the beer side of Constellation. They’re not just making money, they want to spend it wisely, too. Just don’t freak out. Enjoy the hell out of your mango/pineapple/watermelon Ballast Point beers instead.

Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

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