U.S. Markets closed

Constellation Brands Buys Stake in Crafthouse Cocktails

Zacks Equity Research

Constellation Brands Inc. STZ, a leading international producer and marketer of beverage alcohol brands, has acquired a minority stake in Chicago-based cocktail producer - Crafthouse Cocktails.

Neither Constellation Brands nor Crafthouse disclosed the financial terms of the deal. We note that Crafthouse will continue to operate independently.

The stake in Crafthouse was acquired through Constellation Brands’ newly created venture capital arm, Constellation Ventures, which has been formed to invest in potential small-scale emerging liquor companies and related technologies. The Crafthouse Cocktails agreement is the first project of Constellation Ventures.

Founded in 2013, Crafthouse Cocktails produces authentic, ready-to-drink, spirits-based cocktails. The company’s portfolio of premium cocktails consists of products like the bottled Moscow Mule (vodka cocktail), Paloma (tequila cocktail) and Southside (gin cocktail). These premium cocktails are available across retail stores in Illinois, Ohio, Michigan and Colorado.

Constellation Brands believes there is a lot of stimulating modernization happening in smaller, high-growth liquor companies which focuses on emerging consumer trends. The company wishes to work in tandem with these small companies and learn more about innovative opportunities from them.

Lately, Constellation Brands has been entering into deals that would expand its global footprint. Earlier this month, the company completed the acquisition of luxury wine brand – Meiomi. Through this acquisition the company has gained the rights to the Meiomi trademark and associated stock of pinot noir and chardonnay. Moreover, the integration of Meiomi is likely to enhance Constellation Brands’ robust brand portfolio, given the former’s high-growth, large-scale and high-margin business. Further, the addition of Meiomi is anticipated to augment the company’s fiscal 2016 earnings per share by 3–4 cents.

Constellation Brands currently carries a Zacks Rank #2 (Buy). Other favorably-placed stocks in the same industry include Compania Cervecerias Unidas S.A. CCU with a Zacks Rank #1 (Strong Buy) and Diageo plc DEO holding a Zacks Rank #2. Another stock in the beverage soft drinks industry worth considering is Primo Water Corporation PRMW, carrying a Zacks Rank #1.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CONSTELLATN BRD (STZ): Free Stock Analysis Report
 
DIAGEO PLC-ADR (DEO): Free Stock Analysis Report
 
CERV UNIDAS-ADR (CCU): Free Stock Analysis Report
 
PRIMO WATER CP (PRMW): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research