Constellation Brands: The Wine, Spirits, and now Beer Giant

You may not know it by name but Constellation Brands, Inc. is a successful wine, beer, and spirits company that has grown quite largely in the recent years.  The company reported a whopping $4.9 billion in revenue for 2014, up 74% from the year before! Why such a strong spurt in growth? Well, specialists say it has much to do with Constellation's acquisition of Grupo Modelo, the maker of Corona and various other Mexican beers.

With brands such as Robert Mondavi, Clos Du Bois, Estancia, Arbor Mist, and Naked Grape, Constellation is definitely a high performer in the wine industry.   What also sets this company apart from other wine companies is the ownership of numerous spirit brands such as Svedka vodka, and Black Velvet whisky.  When Anheuser-Busch InBev tried to acquire Grupo Modelo earlier last year, it was revoked due to an anti-trust law and Constellation got ownership.  This means that Constellation is now able to produce and distribute Corona, Pacifico, and Modelo brands to US consumers. 

However, recently Constellation is getting some negative feedback about its popular beer Corona.  People think they are selling crappy beer with the glorified feeling of being on a nice sunny beach.  Although it is the 5th bestselling beer in America, beer experts tend to feel otherwise:

After 3,200 reviews at RateBeer.com, Corona has a grade of 1.69 out of 10. The Beer Advocate gives Corona an “awful” rating of 55 out of 100 and the following description: “faded aromas of sulphur, faint skunk, mild cooked veggies.”

Last holiday season Corona  "rolled out the same tired old ads" of a palm tree with holiday light. Are people getting sick of the "sand, sun, and lime wedge" image that Corona advertisements portray?
I think that the new ownership of these beer brands should come with a brand new advertising campaign. After all, beer is all about marketing. I do get that Constellation doesn't want to interfere with a campaign that is already profitable.  Perhaps they could jazz up another beer that they distribute, that is of better taste and quality.  It will be interesting to see the campaigns that Constellation sets out this year during the Super Bowl!

 

The Rise of the Fast Casual Restaurant

Next time you’re in a little bit of a rush and don’t want to spend an arm and a leg on lunch, ditch the Mickie D’s drive-thru and head elsewhere. Many Americans, without even knowing it, have been dining at “fast casual” type restaurants for the last couple of years.  Places like Chipotle Mexican Grill and Blaze Pizza are setting the standard for successful fast casual restaurants.  They are casual eateries, where one can feel comfortable eating by oneself and also watch their food being made right in front of them. 

           

Chipotle has made a killing in the last couple of years, seeing as though the company is now worth $16 billion.  This is attributed to a couple factors. Firstly, you can customize your food however you’d like it, and you know that they’ll get it right because you are telling them as they make it.  No one tends to like it when they open up a burrito from Taco Bell and find it smeared with sour cream when they had clearly told the lady no sour cream!

What makes it different and perhaps more appealing than places like In-N-Out, is the fact that you can see all the various toppings and options.  Visually looking at colorful and fresh ingredients is a huge plus.  Seeing is believing, and you best believe that Chipotle and its customers know that already.

When one first holds a ridiculously huge Chipotle burrito, the feeling is pure delight.  Honestly, it makes any other burrito look pathetic.  For around the reasonable price of $6.50, you get major bang for your buck.  Generally, most entrées at sit-down restaurants tend to be a couple bucks more expensive than your typical fast casual entrée. 

           

 Dining in is also a nice experience.  Chipotle employees greet you with smiles while chanting “Welcome to Chipotle!”.  The atmosphere is super cool and modern: plywood and sleek steel furniture, giving it a light and refreshing look.  Anyone would rather be spotting sitting in a Chipotle during a lunch break rather than a Burger King, am I right? Trendiness is a real biggie, and Chipotle has mastered it.

The biggest upside may very well be the fresh, locally produced ingredients that are pledged by most of these eateries. Chipotle calls it “Food With Integrity” – they promise to only use meat and produce that hasn’t been altered by hormones or antibiotics.  Mentioning this on the menu of each of its two thousand and something restaurant really helps boost its reputation.   Nowadays, where everyone seems to be talking about the new “superfood” and why we should be anti-industrialized agriculture, it is important that companies adapt in the form of what they have to offer.  After all, being environmentally and health conscious is a very marketable commodity in today’s society. 

All of these benefits have created a strong sense of consumer loyalty for Chipotle as a fast casual brand.  In fact, some people seem to prefer waiting in the long twenty-minute lines during lunch hour, rather then go to a fast food restaurant.  If they were in a hurry, they could just order on the Chipotle mobile application on their phone and their burrito would be ready to pick up! 

           

Overall, this says a lot about American culture and society.  We are noticing a trend of getting what we want, exactly how we want it, and in the best way possible.   Fast food used to be a large facet of American life, and now we are seeing it slowly diminish and being substituted with better alternatives.  We are constantly striving to do better, whether it’s for our health or the health of our environment. Supporting restaurants like Chipotle indicates the evolving nature of Americans and our diets.

Why we need a few more Elon Musks around...

He's our 2014 commencement speaker. He's the CEO of Tesla Motors and SpaceX, and the founder of PayPal.  Elon Musk is doing big things.
The native South African taught himself computer programming at age 12 and sold his first video game for $500.  He successfully sold his email payment service PayPal for $1.5 billion to Ebay.  He founded a space exploration company and solely funded its early stages with $100 million of his own fortune.  He turned around Tesla Motors, which is the only electric car company that has had much success, even after ten years of losses on its financial statements.

Why should we care?

SpaceX: Elon Musk wants to take people to space, more people than ever before.  He is nicknamed the "poster child of the commercial space travel revolution".  With government affiliated agencies like NASA contracting most of their work out now because of funding cuts, private companies are now potentially very lucrative.  Musk stated that he wanted to reduce the cost of space travel by a factor of 10, eventually leading to the colonization to Mars.  Musk is a forward thinker and in many interviews states the risks of living in a modern world where anything can go wrong, and creating an "escape" on another planet will prove very useful:

"An asteroid or a super volcano could destroy us, and we face risks the dinosaurs never saw: an engineered virus, inadvertent creation of a micro black hole, catastrophic global warming or some as-yet-unknown technology could spell the end of us. Humankind evolved over millions of years, but in the last sixty years atomic weaponry created the potential to extinguish ourselves. Sooner or later, we must expand life beyond this green and blue ball—or go extinct."

Tesla: We see them around sometimes and its always cool to point them out!  Tesla is making 550 cars per week, but selling them like hot cakes. There is a wait time of up to 6 months for the Tesla Model S.  They are even set to come out with a minivan version in the next year or two, as well as dramatically increasing the amount of supercharger stations across the globe.  This all seems great but Tesla is running into some major roadblocks.  The selling of Tesla is now banned in 5 states because of automobile dealers lobbying in state legislatures to halt the direct-to-customer approach that Tesla uses. It will be interesting to see how this pans out.  Even though Tesla is loses 5 states worth of sales, I think it makes the brand more exclusive and desirable.  People who want the car, and have the money to buy it, still cannot buy it easily!

Hyperloop:  Elon Musk is currently working on a plan to create a aerodynamically absurd transportation system that would theoretically get people from Los Angeles to San Francisco in 30 minutes! The project is estimated to cost $6 billion, and would only use solar power.  Just imagine the possibilities...

Elon Musk, you've done it all by the time you reached 42, and there is still a lot more to look forward to.