Diageo vs. Constellation Brands vs. Ambev: Three Ways to Bet on the Global Drinks Trade

Diageo (NYSE:DEO | DEO Price Prediction), Constellation Brands (NYSE:STZ), and Ambev (NYSE:ABEV) all operate in the global drinks trade, but their most recent earnings painted three very different pictures. Diageo is cutting its dividend and repairing a stretched balance sheet. Constellation is doubling down on Mexican beer while shedding wine assets. Ambev quietly delivered margin expansion for a third straight year while building a digital distribution empire in Latin America.

Diageo Hits Reset. Ambev Keeps Building. Constellation Holds the Line.

Diageo’s H1 FY2026 net sales of $10.46 billion fell 4.0% year over year, with pain concentrated in North America down 7.4% and Asia Pacific down 13.0%. Tequila was the headline casualty. Don Julio fell 20.9% organically and Casamigos dropped 30.9% as consumers traded down from premium spirits. The dividend cut was the unavoidable response to a leverage ratio of 3.4x against a target of 2.5-3.0x.

New CEO Sir Dave Lewis offered this: “Only several weeks in I can already see significant opportunities for Diageo to act more decisively to enhance its competitiveness and broaden the portfolio offering leading to higher growth.” A hopeful framing for a company whose stock has fallen 26.48% over the past year.

Constellation’s quarter looked messy on the surface. Revenue of $2.22 billion fell 9.8% year over year, but strip out divestitures and organic decline was only about 2%. The beer business held a 38.0% operating margin despite aluminum tariff pressure. Pacifico and Victoria are the growth engines, with depletions up more than 15% and 13% respectively. Modelo Especial softened but remains the number one dollar-selling beer brand in the U.S.

Ambev had the cleanest story. Full-year 2025 EBITDA margin reached 33.4%, up 50 basis points, marking the third consecutive year of margin improvement. Premium and super-premium beer volumes grew high-single digits. The BEES B2B platform posted GMV growth of 70%, and Zé Delivery hit R$4.7 billion in GMV with 67 million yearly orders. That digital infrastructure is a genuine competitive moat in a market most investors overlook.

Three Bets, Three Risk Profiles

Diageo’s path back runs through balance sheet repair first. The planned sale of EABL to Asahi for approximately $2.3 billion in net proceeds helps, and $625 million Accelerate savings program provides some cushion. But Lewis won’t lay out his full strategic vision until summer 2026, meaning investors are buying uncertainty right now.

Constellation’s concentrated bet on Mexican beer is either its greatest strength or biggest vulnerability depending on tariff policy. The company is spending roughly $1.0 billion per year on Mexico brewery capacity while navigating aluminum cost headwinds, limiting flexibility.

FIFA 2026 as a Near-Term Catalyst

Both Diageo and Ambev have FIFA World Cup 2026 exposure. Diageo has sponsorship deals across Casamigos, Don Julio, Smirnoff, Johnnie Walker, and Buchanan’s. Ambev sees the tournament as a consumer engagement opportunity across its core beer portfolio. The key question is whether either company converts that visibility into durable volume gains rather than a one-quarter spike.

Why Ambev Stands Out

Among the three, Ambev posted the strongest combination of margin improvement and shareholder returns over the past year. Diageo’s path forward remains uncertain until the summer 2026 strategy update. Constellation’s concentrated exposure to Mexican beer imports creates a binary tariff risk. Ambev, trading at a forward P/E of around 14x with a dividend yield near 11%, delivered the strongest recent profit growth of the three. The FX risk is real, but BEES platform momentum and premium brand growth suggest a business structurally getting stronger. Diageo’s summer 2026 strategy update will be a key event for investors watching the turnaround thesis.