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Raise A Glass To Prosperity

You might say Constellation Brands (STZ) is a sparkling company, at least currently. The world's largest winemaker (as well as the manufacturer of Corona and more) is trading up 1.5%after it upped guidance and reported earnings that beat Street estimates. Can Constellation sustain growth or is it likely to fizzle?

Constellation Brands’ new Chief Executive Rob Sands joins the panel for this conversation. Following are excerpts from what was said.

There had been a glut of grapes from Australia. What’s the situation now?

“Unfortunately for the Australian people there’s been a drought. But, as a result, the glut has greatly diminished,” says Sands. “In fact we’re going to see that glut turn into shortages.”

He adds “We’re cautiously optimistic about our prices for Australian wine; these kinds of shortages should be a positive thing for us.”

Is there momentum supporting premium alcohol?

“Yes. The spirits markets have been strong,” replies Sands. “There continues to be a lot of trading up in the market. Trading up to products like our Effen vodka.”

Is there any action in beer?

“Beer has been a good category for us, too” replies Sands. “Especially premium imported beer. Our company has enjoyed the benefits of trading up in the beer category with great brands such as Corona and St. Pauli Girl as well as other brands.”

Do you think past integration problems are behind you now?

“We really haven’t had integration problems,” replies Sands. “In our beer business we formed a joint venture.. and there were some initial start up issues. Other than that everything is performing quite smoothly.”

What’s your biggest market outside the US?

“Our biggest market (outside the US) is the UK. It’s another pretty strong market for consumption,” answers Sands.

He adds “Globally… markets like India and China are becoming more sophisticated in their tastes and are becoming great markets for alcohol products.”

Dylan Ratigan asks the panel what they think of this stock?

Jeff Macke likes STZ as well as Molson Coors (TAP).

Symbol
Price
 
Change
%Change
STZ
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TAP
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Trader disclosure: On Oct 4, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (ATI); Najarian Owns (ENER), (RIMM): Finerman Owns (COV), (GS),: Finerman's Firm And Finerman Own (HD): Finerman's Firm Owns (JNJ), (PSS), (KSS), (BEAS), (BWS), (COP), (NYX), (NMX), (VMSI): Finerman's Firm Owns S&P 500 Puts: Finerman's Firm Owns Russell 2000 Puts; Seygem Asset Management Owns (AA), (VIP), (GLD): GE Is The Parent Company Of CNBC

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