Constellation Brands Inc. (NYSE:STZ) Q4 2020 Earnings Conference Call - Final Transcript

Apr 03, 2020 • 10:30 am ET

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Constellation Brands Inc. (NYSE:STZ) Q4 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question comes from Bonnie Herzog with Goldman Sachs. You may proceed with your question.

Analyst
Bonnie Herzog

All right, thank you. Hello, everyone.

Executive
Bill Newlands

Welcome back Bonnie.

Analyst
Bonnie Herzog

Oh, yeah, thank you. So, I wanted to get some clarification on the Mexican government's decision, which determine that alcohol's non-essential. And I just wanted to make sure I understand what you're sharing with us today that if I heard you correctly, you are not suspending your production. But what I'm hearing is -- lot of the other brewers are suspending. So I just wanted to make sure I heard you correctly. And then, curious to hear how you see this situation evolving and maybe what your contingency plans are? You did share with us some of the, I think, finished inventory that you have on hand to meet the U.S. demand, but I just kind of wanted to understand where you're at with that specific situation? Thanks.

Executive
Bill Newlands

Sure. So as we stand today, we are currently operating. We also have, as I noted in my script, roughly 70 days through the system at either -- and that does not include at retail. That is purely that we have or our distributors have so we are fairly confident that we will see no disruption at retail from our operations and we'll be able to meet consumer demand as it continues.

Operator
Operator

Thank you. Our next question comes from Kaumil Gajrawala with Credit Suisse. You may proceed with your question.

Analyst
Kaumil Gajrawala

Thank you. Good afternoon, everybody. Bill, I think you mentioned that you're working through a series of options and what's going to happen with Mexicali. Like, obviously, we don't know which of those options you'll take, but could you at least give some insight on what your options are from this stage?

Executive
Bill Newlands

We're not prepared to go through what the exact options are. What I would say is this; we had a very productive meeting with the President and his team. I think there is mutual agreement that we have been a strong player in Mexico for 30 plus years and that that strong relationship is going to continue and that we will have solutions for the long-term to make sure that we are able to meet the strong consumer demand that we continue to have for our brands. So while I'm not prepared to talk about the specificity of that, we are very comfortable that our discussions will yield strong medium- and long-term benefits for our business.

Operator
Operator

Thank you. Our next question comes from Vivien Azer with Cowen. You may proceed with your question.

Analyst
Vivien Azer

Thank you. Good morning. I was just hoping to go to the on-premise, off-premise mix, Bill, very helpful in terms of contextualizing the revenue mix. But Garth, I was wondering whether you could offer any insight into the margin differential given the presence of kegs in the on-premise? And then as a follow-up to that, is it possible for you guys to move cans and bottles that are no