Raise your glass! Find out how this company’s products stay on top of mind in the alcoholic beverages category! [Monday: Marketing Marvels]
It was in 1945…
… when one company had its humble beginnings as an upstate New York wine producer.
Today, this corporation is one of the CPG (consumer packaged goods) leaders in the industry, delivering “powerhouse brands and best-in-class experiences that people love.”
Curious about what company we’re talking about?
It’s…
Constellation Brands, Inc.!
Constellation Brands is an American producer and marketer of beer, wine, and spirits. The company is one of the top growth contributors among alcoholic beverage suppliers in the US market.
Headquartered in New York, Constellation Brands has around 40 facilities and approximately 9,000 employees in different countries all over the world.
Some of the company’s well-known brands include:
- Corona
- Modelo
- 7 Moons
- Charles Smith
- Ruffino
- Drylands
- Casa Noble
- SVEDKA
- High West
- Champagne Palmer & Co.
How does Constellation Brands connect with beer, wine, and spirits consumers across the globe?
One way is through a multi-pronged mobile strategy!
According to Chris Fehrnstrom, chief marketing officer of the Wine and Spirits Division at Constellation Brands, the company invests 25% of its marketing budget on digital because consumers tend to be heavy users of mobile devices nowadays.
He said:
“We have really made a conscious effort over the last four years to move more towards digital. Unlike many other CPG categories, we’ve made a more cognizant effort to engage in mobile, whether it be through advertising or partnership on an application front.”
One of the things the company did under this strategy is to partner with Hello Vino, an app that has over 1.5 million downloads and caters specifically to wine consumers.
By utilizing this app, Constellation Brands is able to advertise to consumers who are interested in buying the company’s wine products.
Constellation Brands also uses a geo-targeted push program, which allows push notifications to be sent to different groups of customers based on their search histories, likes, or recent purchases.
What else is the company utilizing under its multi-pronged mobile strategy?
The Shopkick App!
Shopkick has an existing partnership with retail company Target Corporation, which is also one of Constellation Brands’ most valuable accounts.
By putting beer, wine, and spirits products at the forefront of Shopkick’s displays, Constellation Brands motivates people to click on the product offers and even buy a few of them!
Another platform the company uses to market its brands and products is Live Sports.
However, when the COVID-19 pandemic caused the cancellation of several sports events in 2020, Constellation Brands also had no choice but to stop conducting marketing activities in these events.
Then…
When news came in the latter part of 2020 that live sport would resume in the US once again, Constellation Brands’s chief financial officer Garth Hankinson said the company wouldn’t let the opportunity pass by.
According to Hankinson:
“As we move into the fall and as sports come back online, we are committed to continuing to spend. We’re seeing that consumers really have a hunger to consume live sports.”
While there’s no doubt that the current live sports setup remains challenging for brands due to the pandemic, Constellation Brands is able to use the start of the American Football and Basketball seasons to resume marketing activations for brands Corona and Modelo.
The company also focuses on at-home viewing at the moment, with Corona extending its presence in the NBA and NFL and Modelo concentrating on digital advertising on the websites of the Bleacher Report, DraftKings, and The Players’ Tribune.
Constellation Brands also creates video ads for other beer, wine, and spirits products such as Woodbridge’s “From One. For All,” Ruffino Prosecco’s “The Pass,” and Meiomi’s “Flavor Forward.”
[ICYMI: Valens Research published a Dynamic Marketing Communiqué article about one of Corona’s Guerrilla Marketing campaigns. If you want to know more about it, click here.]
In the past five years, Constellation Brands, Inc. has recorded revenues of:
- USD 6.6 billion in 2016
- USD 7.3 billion in 2017
- USD 7.6 billion in 2018
- USD 8.1 billion in 2019
- USD 8.3 billion in 2020
Clearly, the proper execution of the company’s marketing strategies paves the way for growth in sales, worldwide reach, and brand awareness.
Constellation Brands, Inc.’s Earning Power: Valens Research vs. As-reported numbers
Constellation Brands, Inc. (STZ:USA) makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator than investors might think.
So, how well has STZ been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent STZ’s earning power (Uniform Return On Assets). STZ has seen generally improving profitability. Its Uniform ROA ranged from 5% to 30% in the past sixteen years, or an average of 18%. Uniform ROA is at 28% in 2020.
The global ROA is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from 3% to 8% in the past sixteen years. Its ROA in 2020 was only at 6%, far lower than its Uniform ROA in 2020.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that STZ has been doing well and making a profit.
Constellation Brands aspires to make a difference by investing in purpose-driven efforts that positively impact communities.
With one top-of-mind question―”What’s next?”―the company presses forward with its team of “smart, diverse talent” who fuel the desire to push boundaries.
As Constellation Brands looks ahead, the future is not only bright…
… but also full of experiences that bring people together.
For Constellation Brands, these are the experiences that are truly “Worth Reaching For.”
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com
