Later this year, there will be a rare passing of the demographic baton, as millennials surpass the baby boomers as the nation’s largest living generation.

Millennials are those born from 1981 to 1997, while the baby boomer generation arose from 1946 to 1964.

By year end, there will be more than 75 million millennials and just under 75 million baby boomers, according to projections by the Pew Research Center, a Washington, DC-based think tank. Moreover, that gap will widen over time, thanks to immigration and an eventual reduction in the number of baby boomers.

For investors, the implications are clear: Millennials are set to become the nation’s main growth engine, taking over the role baby boomers began to assume in the mid-1960s.

To be sure, millennials face their share of obstacles to prosperity such as a tepid economy, somewhat gloomy job prospects and, in many cases, heavy student loan debt. But they have two powerful factors in their favor: the sheer size of their generation and the U.S. economy’s renowned resilience.

Together, these factors should translate to progressively greater spending power, which sooner or later, will rival that of the baby boomers.

That backdrop warrants a bullish long-term outlook on companies that are proficient at convincing millennials to loosen their purse strings. One of the most adept: Constellation Brands, Inc. (NYSE: STZ).

The alcoholic beverages retailer isn’t a top play on the millennial generation just because it’s an industry leader, with annual sales of $6 billion. More importantly, the firm focuses on the types and brands of alcoholic beverages that millennials prefer.

A couple years ago, for example, Constellation became the full owner of Crown Imports, LLC, which had been part-owned by a Mexican beer maker with several brands that are popular with Hispanics and millennials.

Crown’s flagship beer brand, Corona Extra, is the best-selling imported beer in the United States, with 105 million cases shipped in fiscal (February) 2015.

Through Crown, Constellation also owns the number-two beer import, Modelo Especial, with 60 million cases shipped last year. The company moved nearly 15 million cases of Corona Light, too, a record for that brand. Overall, beer segment revenue surged 12% in the past year.

A key takeaway from the year-end conference call: the beer segment’s strong “depletion volume,”  which is an industry term for product movement from distributors to retail customers. Last year, segment depletions rose 8%, “reflecting strong consumer demand for all key brands within the beer portfolio,” management said. A spike in distributor orders during the second half of the year portends robust consumer demand during the crucial summer selling season.

A dominant beer segment was the primary fuel for what has been a long run of impressive results. During the past five years, sales climbed almost 80%, while earnings soared more than nine-fold to $4.17 a share. Operating margins nearly tripled to 25% from 9%.

Since the end of April 2010, Constellation’s stock has rocketed up by more than 520%.

To maintain the strong pace of expansion, management wisely plans to keep leveraging top beer brands. Through increased marketing and distribution, the goal is to double beer segment volumes to 360 million cases by 2024 from 180 million in 2013.

#-ad_banner-#Ultimately, management expects to double Constellation’s share of the U.S. beer market to 20%. Along the way, Corona Extra and Modelo Especial sales could potentially soar to roughly 200 million cases, and 120 million cases per year, respectively.

Constellation also plans to stimulate sales by using more aluminum cans, which are overtaking glass bottles as the beer packaging of choice. That’s because they’re cheaper and many consumers prefer them (or have no preference). Thus, cans are both a growth and cost-saving opportunity, since only around 20% of Constellation’s beers are canned, far below the industry average of about 50%.

Though most of the firm’s growth comes from beer sales, Constealltion also operates a substantial wine and spirit businesses. Together, these account for 47% of total revenue. Trouble is, sales in these segments have been mostly flat lately, and their shipment and depletion volumes have slipped.

But they could finally be at a turning point. In fiscal 2015, the two segments posted combined operating income of $674 million, a 6% improvement, thanks to strength in several premium wine and spirit brands.

Looking forward, the wine segment in particular is set for better growth. Millennials are partial to wine and have been adopting the beverage at a faster rate than any other generation, analysts say.

To better capitalize on this trend, Constellation has been developing wines specifically suited to millennials’ tastes. When marketing any products to this tech-oriented group, the company also wisely targets them through a variety of social media.

Risks to Consider: Two years after the Crown Imports buyout, Constellation is still highly leveraged, with about $7 billion of long-term debt. Though financially stable now, a shift in sales trends could lead to rising financial challenges.  

Action to Take –> Constellation Brands has historically been a well-run company. If the balance sheet was unsound, I doubt management would have gone ahead with plans for a first-ever dividend, a $0.31-a-share quarterly payout announced just a few weeks ago. Annualized, this translates to a 1.1% yield.

At 28 times last year’s earnings, Constellation’s stock is looking fairly expensive, so waiting for a pullback before investing makes sense. But even at current prices, shares offer approximately 30% upside through 2017, as growing U.S. beer market leadership and smart efforts to reach millennials position earnings for mid-double-digit compounding in coming years.

Want to avoid the hassle of digging into a company’s financials and decoding corporate lingo?StreetAuthority’s Stock Of The Month delivers full analysis of one premier investment to your inbox each month. To learn more about this service, click here.