Jim Cramer, the host of CNBC’s Mad Money, did not hold back his criticism when a caller asked about Constellation Brands Inc. (NYSE:STZ). Known for its portfolio of beer, wine, and spirits—including top sellers like Modelo—Constellation Brands has recently faced mounting challenges across its business segments. Cramer, voicing his disappointment, stated, “The beer business is soft. The spirit business is not so good, and frankly, I expected more from the company.”
He went on to say that he sees no reason to invest in a stock that continues to underperform. “I think the company has been a very big disappointment,” he added, even acknowledging a personal connection through his wife’s involvement in the industry. Despite recognizing the brand’s efforts to recover, Cramer expressed little confidence in its near-term prospects.
Industry Pressures and Changing Consumer Behavior
Constellation Brands, a major player in the alcohol industry, is grappling with broader shifts in consumer preferences. Jim Cramer previously addressed the company’s struggles during an appearance on Squawk on the Street in April. He pointed to a “shocking guide down” in company expectations, noting that growth in its beer segment,once projected at 7% to 9% over two years, had flattened.
The company’s flagship beer, Modelo, remains a top-selling brand, but Cramer warned this alone is not enough to shield STZ from the broader industry slowdown. He suggested that declining alcohol consumption trends, particularly in the beer category, are playing a major role. “The craving for beer is no more than the craving for sparkling water,” Cramer remarked, referencing studies that show shifting preferences—partly influenced by health-conscious behaviors and possibly the rise of GLP-1 weight-loss drugs that suppress appetite and alcohol consumption.
Cramer also hinted at demographic trends possibly affecting Constellation’s core markets. He speculated that Hispanic consumers, a key segment for the brand, may be spending less due to broader socio-economic concerns, a pattern that has occurred in past market cycles.
Jim Cramer Recommends Looking Elsewhere, Eyes AI Growth
While Cramer acknowledged Constellation Brands’ long-term potential, he made it clear that, in his view, there are more promising investment opportunities elsewhere. Highlighting the growth of artificial intelligence (AI) and its impact across industries, Jim Cramer suggested that certain AI stocks offer greater upside potential with fewer risks. “If you are looking for an AI stock that is more promising than STZ,” he advised, “there are options out there with 100x upside potential.”
For investors tracking STZ, Cramer’s comments serve as a stark warning amid growing concerns about stagnation in the alcohol sector. As companies like Constellation struggle to adapt to evolving consumer habits and economic pressures, market experts like Cramer are increasingly turning their attention to sectors that offer innovation, scalability, and stronger future demand.
