Constellation Brands (NYSE:STZ) is well-known among investors and followers of the alcohol industry as the company that rocketed up over 600% in the last five years.

In this segment from the Industry Focus: Consumer Goods podcast, Motley Fool analysts Vincent Shen and Asit Sharma talk about why and how the company is moving away from the multi-category strategy that earned them that growth, and how a stronger focus on beer is going to reward them in the years ahead.

A transcript follows the video.

This podcast was recorded on June 14, 2016.

Vincent Shen: We're going to work through quite a few shelves at the bar, so let's get started, Asit. The first company is Constellation Brands, ticker STZ. They're a major player in the industry with about $30 billion market cap. They are the third-largest beer producer in the U.S. -- similarly, the biggest multi-category company in the United States, meaning they offer the trifecta of beer, wine, and spirits -- though that might not be the case after we talk about this segment. Then, rather, unlike its bigger competitors where they might hone in on a specific beer or spirits specifically, Constellation's management team, though, it seems like they might be trying to move away from the multi-category. What do you think?

Asit Sharma: Yeah, it's a great point. A lot of our listeners are familiar with Constellation Brands because they watched the stock price shoot up over 630% these last five years. They've done that by building a foundation first as this multi-category manufacturer/marketer in spirits, wine, and beer. But in 2013, Constellation Brands bought the Mexican beer portfolio from Anheuser-Busch InBev. As part of that agreement, Constellation Brands got the distribution rights for this beer portfolio in the United States. That enabled the company to take off. Beer has become the predominant business. It's still a very well-diversified business, but the beer sales are through the roof, and Constellation Brands has invested in new manufacturing capacity -- several billion dollars to build new bottling plants, new distribution just south of the border in Mexico. They are starting to lean toward becoming more of a beer-centric company.

Shen: I think something that really kind of drives that home, too, is the company has spent, when I calculated, almost $5 billion, I think, on M&A in the past three-to-four years. The bulk of that has been dedicated to beer properties. One of the more-recent ones was the Ballast Point deal, worth $1 billion. I think it's one of the largest -- if not the largest --craft-beer acquisition to date. A pretty clear indicator of how focused they are now on that particular category.

Sharma: That's true. What we see in that particular acquisition is the potential in craft beer is phenomenal, because that market is growing very quickly. If you think back 10 to 20 years ago, you had a very-limited selection. You walked into a grocery store of beers to buy -- they were dominated by the big brands. But this all changed, and the way people consume beers has meant that those companies which can grab the market share are going to win, and Constellation Brands' management is very aware of this. They don't mind putting up big dollars to buy small, sometimes obscure, companies, so that they can scale those companies out. Of course, Ballast Point is not really an obscure company; in the West Coast, it's known very well, and among craft breweries, it's one of the larger ones.

But this idea to go in, scoop up a small company, and then scale the distribution through a wide system, like Constellation Brands, is an attacking strategy; but it's one in the long run which should increase their earnings, and help grow their revenues consistently above where the beer market is growing.

Asit Sharma has no position in any stocks mentioned. Vincent Shen has no position in any stocks mentioned. The Motley Fool recommends Anheuser-Busch InBev NV. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.