Constellation Brands: beer projects in Mexico
Constellation Brands, the brewing company and the No. 1 seller of imported beer in the U.S. market, reported on its projects in Mexico.
During Fiscal 2023, which ended last February 28, it incurred capital expenditures of US$1.035 billion, including US$813.9 million for the Beer segment, mainly for the Beer Projects in Mexico.
Now, for fiscal 2024, the company plans to make capital expenditures of between $1.2 billion and $1.3 billion, of which approximately $1.0 billion will be for the Beer segment, primarily related to the Beer Projects in Mexico.
The remaining capital expenditures planned for fiscal 2024 consist of improvements to existing operating facilities and the replacement of existing equipment and/or buildings.
Management periodically reviews the investment program and modifies it based on the current and future needs of the Company.
In April 2022, the Company announced that, with the assistance of the Mexican government and state and local officials in Mexico, it acquired land in Veracruz for the construction of the Veracruz Brewery, where water is abundant and skilled labor will be available to meet its long-term needs.
The design and construction process for the Veracruz brewery is underway.
Over the past 10 years, Constellations Brands has quadrupled its production capacity in Mexico, further expanding its leadership position in the high-end segment of the U.S. beer market.
Since the 2013 acquisition of the imported beer business, the company has invested approximately $6.4 billion in the Mexico Beer Projects, with more than $750 million spent during Fiscal 2023.
During Fiscal 2023, the brewery’s optimization and productivity initiatives unlocked incremental capacity in its existing footprint, increasing total capacity from approximately 39 million hectoliters to approximately 42 million hectoliters.
The company plans to spend an additional $4.0 to $4.5 billion between fiscal 2024 and 2026.
Expansion, optimization and/or construction activities continue at its Mexican breweries to meet projected future business needs.
As of February 28, 2023, the production capacity of Constellations Brands’ Mexican breweries was approximately 42 million hectoliters.
By the end of fiscal 2026, the company expects to increase its capacity in Mexico to approximately 67 to 72 million hectoliters to support the growth of its Mexican beer brands.