Despite a decline in the wine and spirits business, Constellation Brands (NYSE:STZ) outperformed its expectations with beer sales with its latest quarterly report. Constellation Brands, whose operations span across the U.S., Mexico, New Zealand, and Italy, delivered a stronger than expected fourth quarter profit, with management indicating that the segment greatly contributed to its success over the fiscal year. 

Fueled by the strength of its beer business, Anheuser Busch InBev SA (NYSE:BUD) rival lifted its full-year earnings and sales forecasts. Constellation Brands guided for earnings in the range between $13.50 and $13.80 eper shareand sales growth between 6% and 7%. Constellation expects its beer sales to rise by a further 10% in the undergoing financial year both due to its brand strength as well as the US consumer’s shift away from wines and spirits in favor of beer.

Interestingly, Anheuser Busch reported its beer sales dropped in North America last year while its non-alcoholic beer sales topped estimates, reflecting the consumer behaviour of more health-conscious consumers. Anheuser Busch responded to the trend with the expansion of beverage choices. With its no-alcohol beer portfolio that includes Budweiser Zero, Stella Artois 0.0 and others, Anheuser Busch reported revenue growth in the high teens, according the annual report. Global Market Insights estimated that between 2023 and 2032, the nonalcoholic wine and beer market will continue growing at an annual rate of 7% and surpass $30 billion by 2025. With Sam Glaetze and his experience that spans over three decades becoming the new leader of the segment,Newlands is confident that the wine and spirits division will improve. On the back of the continued resilience of its core beer brands, Constellation confidently lifted its full year guidance.