:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/WXZWMMWFHFHNPBRYZ5GH4M7PGA.jpg "Constellation Brands, which produces Corona beer and other Grupo Modelo brands for the US market, will invest 70% of its total budget in Mexico this fiscal year.")
Mexico City — Constellation Brands, the brewer of Mexico’s Grupo Modelo’s brands for the US market, will invest $1 billion in Mexico this fiscal year in a bid to expand its beer production capacity in the country.
The resources that the company will allocate to Mexico represent more than 70% of its annual investment budget.
Constellation Brands also has an international wine and spirits business.
Constellation Brands’ investment plans for fiscal year 2024, which began in March 2023, will be between $1.2 billion and $1.3 billion at a consolidated level, across all business units, according to its quarterly report.
In Mexico, the brewer is preparing the construction of a plant in the state of Veracruz, after the cancellation of plans to build a plant in the northern border city of Mexicali due to water shortage concerns.
The company will also allocate resources to the expansion of the plants already operating in Mexico.
The investments that Constellation plans to make this fiscal year in Mexico are part of a broader plan of which between $4 billion and $4.5 billion remain to be made over the next two fiscal years.
Beer sales decline
Constellation Brands reported a 2% drop in beer sales between December and February, compared to the same period of the previous year.
Meanwhile, its operating income for this business fell 15%, amid pressures on raw material costs, packaging, currency depreciation and logistics costs.
For the full fiscal year, which ran from March 2022 to February 2023, beer sales grew 11%, while operating income rose 6%.
:quality(75):focal(603x43:613x53)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/POROS6TIP5DXFAADPROE5C2RVQ.jpeg "NYSE-Listed Latin American Unicorns See Their Valuations Sink")
