In this article, we are going to discuss the 12 best brewery stocks to buy according to hedge funds.
The global alcohol industry is currently grappling with strict regulations, high taxes, inflation, and rising costs, which are likely to persist and may squeeze the profit margins of alcohol producers. The global brewing industry had been hit particularly hard as beer production worldwide fell to 1.88 billion hectoliters last year, representing a YoY decline of 0.9 %.
Peter Hintermeier, Managing Director of BarthHaas, commented:
“After we had managed to post modest growth in 2022 despite unfavorable conditions, we were expecting another small increase in 2023. However, energy, raw materials, packaging, logistics, and labor costs remained at a high level, which put pressure on the brewing business in many countries.”
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The American brewing industry is also faced with a declining demand, as beer consumption in the US last year fell to its lowest level since the 1970s, according to the Brewers’ Association. In fact, in 2022, the American spirits industry surpassed beer in revenue for the first time ever. The trend then continued in 2023, driven primarily by the spirits RTD category. Nevertheless, the country’s major brewers were still in good financial health, thanks to rising prices and a consumer shift towards more expensive, often imported beers.
A major factor behind the decreasing demand is also global drinking habits have shifted dramatically over the last few years. The modern consumers are increasingly focused on health and wellness and seek alternatives to traditional alcoholic beverages, giving rise to the rapidly growing low and no-alcohol trend. To make sure they don’t miss out on the opportunity, several industry behemoths have hopped on the zero-alcohol bandwagon and are now offering products with all of the taste and none of the booze.
Despite the aforementioned challenges, the alcohol sector can be an attractive option for investors looking to diversify their portfolios, simply because of the buffer it provides during tough economic times. An analysis by Goldman Sachs has revealed that beer and spirits volumes in the American market have shown little correlation with economic growth. Their sales are more related to the general trends of alcohol consumption per capita rather than the general state of the economy. This is because beer and spirits are often seen as affordable luxuries or even staples.
According to a study by Cambridge University, the decreasing levels of average per capita income lead to very small changes in gross alcohol, wine, and beer consumption. In fact, the surge in unemployment during recessions could instead trigger an increase in the average alcohol intake.
A great example of this is how Americans drank more alcohol during the pandemic and this was also reflected in the resultant imposts collected by the national kitty. Alcohol tax revenues collected by the U.S. Treasury Department rose by 8% in the fiscal year that ended on Sept. 30, 2021, compared to the previous year, and remained well above pre-pandemic levels.
Another popular investment vehicle in the alcohol industry is rare whiskeys. Aptly named ‘Liquid Gold’, this beloved liquor can preserve and even increase in value during economic instabilities, inflationary periods, and recessions. One simply cannot forget about the bottle of The Emerald Isle Collection that sold in auction earlier this year for $2.8 million, or the 1975 cask of Ardbeg single malt which was acquired by a private collector in Asia in 2022 for over $20 million, more than double the amount Glenmorangie paid for the entire Ardbeg distillery and all its stock in 1997.
The Rare Whisky 101 Apex 1000 Index tracks whiskeys that are highly sought after for collection. It has gained over 384% since 2013, against almost 301% gains by S&P’s famous benchmark of the top 500 companies for the same period. The RW Japanese 100 Index, which includes 100 collector’s bottles from Japan, has seen gains of around 350% since 2015. The index includes bottles like Ichiro’s Malt ‘Card’ Ace of Spades, Ace of Diamonds, and King of Hearts, among others.
With that said, here are the Best Alcohol Stocks to Buy Now.
Photo by Wil Stewart on Unsplash
Methodology:
To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 12 companies operating in the brewing sector with the highest number of hedge fund investors. When two or more companies had the same number of hedge funds investing in them, we ranked them by the revenue of their last financial year instead. Following are the Beer Alcohol Stocks Held by the Most Hedge Funds.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12. Compañía Cervecerías Unidas S.A. (NYSE:CCU)
No. of Hedge Fund Holders: 3
Compañía Cervecerías Unidas S.A. (NYSE:CCU) is a beverage giant that operates in Chile, Peru, Argentina, Bolivia, Colombia, Paraguay, and Uruguay. The company, known for its Cristal brand, is one of the biggest brewers in its home country of Chile.
It was announced in October that Compañía Cervecerías Unidas S.A. (NYSE:CCU), which distributes PepsiCo products in Chile, has struck a deal for its rights also in Paraguay. The company has acquired a 51% stake in Bebidas del Paraguay, Distribuidora del Paraguay, and AV, in association with Vierci Group. This marks Paraguay as the second country where CCU holds the PepsiCo license, promising growth and investment opportunities.
Compañía Cervecerías Unidas S.A. (NYSE:CCU) had a mixed Q3 2024 as organic volumes were down 6.9%, mostly due to a weakened demand in Argentina. However, its Chilean segment saw a 7% revenue increase, driven by a 5.2% rise in prices and improved volumes. All in all, the company managed to achieve a net profit of CLP 29.55 million ($29.77 million) during the quarter, a significant 211% increase from the same period last year. CCU also offers an above-average annual dividend yield of 3.67% as of December 28, 2024.
Compañía Cervecerías Unidas S.A. (NYSE:CCU) continues its focus on expanding its product line and recently launched Escudo Maki, a limited-edition variety produced with wild maquis collected by an agricultural cooperative in the south of Chile. Moreover, its subsidiary CPCh launched ‘Hard Fresh: Hard Soda’, a 5% ABV ready-to-drink cocktail in response to the growing demand for low alcohol options with nice flavors.
In Q3 of 2024, shares of Compañía Cervecerías Unidas S.A. (NYSE:CCU) were held by 3 hedge funds in the IM database, with First Eagle Investment Management holding the largest stake of 15.69 million shares, valued at around $182.47 million.
11. SNDL Inc. (NASDAQ:SNDL)
Number of Hedge Fund Holders: 10
SNDL Inc. (NASDAQ:SNDL) is the largest private-sector liquor and cannabis retailer in Canada. Though not a pure-play brewing company itself, SNDL offers a selection of thousands of beers in its stores. The company also operates as a licensed cannabis producer and stands as one of Canada’s premier vertically integrated cannabis enterprises.
Like many other companies involved in the cannabis business, SNDL Inc. (NASDAQ:SNDL) has been focused on sales growth instead of profits, increasing its revenue from $60.9 million in 2020 to just over $909 million last year. However, the liquor and cannabis retailer still hasn’t turned a profit in its last four financial years. It seems like the strategy is changing now as the Calgary-based company announced a restructuring plan in July to help slash its annual expenses by $20 million and finally improve its profitability.
In Q3 of 2024, SNDL Inc. (NASDAQ:SNDL) reported a net revenue of $144.6 million from its liquor business, a decline of $7.2 million or 4.8% compared to the prior year. However, the company continues to believe in the long-term potential of the segment, which still managed to deliver significant growth in operating income.
SNDL Inc. (NASDAQ:SNDL) also remains financially strong and ended the third quarter with a cash balance of $263 million, up from $183 million in Q2, with no outstanding debt. To return value to its shareholders, the company also announced a share repurchase program of around $70.3 million in November. The company is on track to deliver positive free cash flow for the 2024 calendar year, meeting or even exceeding its guidance.
SNDL Inc. (NASDAQ:SNDL) is focused on strategic expansion and announced the acquisition of all outstanding shares of Nova Cannabis Inc. recently, marking a major milestone. Moreover, it has also closed the acquisition of Indiva, enabling it to emerge as the leader in the Canadian infused edibles category.
In the third quarter of 2024, shares of SNDL Inc. (NASDAQ:SNDL) were held by 10 hedge funds tracked by IM with a total stake value of $23.34 million, up 42.5% from the previous quarter.
10. Tilray Brands, Inc. (NASDAQ:TLRY)
Number of Hedge Fund Holders: 16
The New York-based Tilray Brands, Inc. (NASDAQ:TLRY) has a highly diversified global portfolio – operating in more than 20 countries with businesses in medical adult-use cannabis, beverages, spirits, wellness products, and a vast array of consumer-connected lifestyle brands.
Though its core business is cannabis, Tilray Brands, Inc. (NASDAQ:TLRY) forayed into the beer sector last year when it acquired eight beer and beverage brands from AB InBev for an undisclosed amount. To further strengthen its portfolio, the company announced in September that it had also completed the acquisition of another four craft beer brands from Molson Coors – Hop Valley Brewing Company, Terrapin Beer Co., Revolver Brewing, and Atwater Brewery. As a result, Tilray Brands, Inc. (NASDAQ:TLRY) is now the 5th largest craft beer operator in America. The company has also diversified into spirits and earlier this year, its Breckenridge Distillery celebrated the wins of World’s Best Finished Bourbon, America’s Best Finished Bourbon, and Icons of Whisky Campaign Innovator of the Year: Highly Commended at the 2024 World Whiskies Awards.
This diversification strategy seems to be paying off. Tilray Brands, Inc. (NASDAQ:TLRY)’s alcohol business now accounts for 28% of its revenue, whereas 31% came from cannabis. A year ago, 13% of its sales were from alcohol and 40% from cannabis. The other two segments, distribution services and wellness products, haven’t changed that much. This comes in response to the slower-than-expected marijuana legalization policies in the US and the EU, and the saturation of the cannabis market in Canada.
That said, Tilray Brands, Inc. (NASDAQ:TLRY) is still the number one cannabis business in Canada, the leading medical cannabis business across Europe, and the top branded hemp business in North America. Earlier this year, the company also entered the lucrative US THC beverage market with a range of Delta-9 THC mocktails and seltzers through its newly formed Tilray Alternative Beverages business unit. Tilray is hoping to dominate the rapidly ballooning market for cannabis-infused drinks since it already has a business and distribution network in place thanks to its beverage-related assets.
In its fiscal Q1 of 2025, Tilray Brands, Inc. (NASDAQ:TLRY) reported record net revenue of $200 million for the first quarter, marking a 13% year-over-year increase, with its beverage division witnessing a significant 132% growth in net revenue. Tilray’s cash and marketable securities balance as of October 31 was $280.1 million, up from $260.5 million at year-end. In its last quarter, the company also paid down over $300 million of its convertible debt. Tilray Brands, Inc. (NASDAQ:TLRY)’s financial strength enables it to pursue new opportunities and capitalize on emerging trends in the market.
9. Ambev S.A. (NYSE:ABEV)
Number of Hedge Fund Holders: 19
Ambev S.A. (NYSE:ABEV), formally Companhia de Bebidas das Américas, is a Brazilian brewing company that has now merged with Anheuser-Busch InBev. It offers beer under several brand names such as Skol, Brahma, etc, and claims to be the largest brewer in Latin America in terms of sales volume. Ambev also has a relationship with PepsiCo to bottle, sell, and distribute its products in several Latin American countries, including Brazil.
Ambev S.A. (NYSE:ABEV) remains challenged by various macroeconomic factors including higher costs of energy, raw materials, packaging, logistics, and labor, which are putting pressure on its brewing operations across various countries. However, with a deep-pocket owner like Ab InBev, an extensive distribution network, and a diverse product portfolio, the company has been resilient in both local and international markets.
Ambev S.A. (NYSE:ABEV) had a mixed Q3 as tax effects impacted net profit, despite a 12% increase in revenue, although sales volumes declined compared to the previous year. The company’s brand strategy continued to work and its premium brands grew by more than 20% led by Corona, Spaten, and Original, all of which witnessed volume upticks of over 25%. The core plus brands grew in the low teens, led by Budweiser, which increased volumes by nearly 50%. This strong performance across various product categories highlights Ambev’s ability to meet diverse consumer preferences. It also means that true beer fans remain willing to pay a premium for the higher-end beers that the company offers.
Over the last five years, Ambev S.A. (NYSE:ABEV) has generated BRL 68 billion (around $11 billion) in free cash flow and it maintained this performance in Q3 2024, as it reported a cash flow of nearly $1.33 billion from operating activities. The company has also benefited greatly from exchange rate fluctuations on cash held in its international operations.
Ambev S.A. (NYSE:ABEV) has returned over BRL 43 billion (approx. $7 billion) to shareholders since 2020 and recently, it approved a BRL 2 billion ($330 million) share buyback program, demonstrating its disciplined approach to capital allocation. The company also announced a dividend of $0.0414 per share earlier this month.
19 hedge funds in the IM database held shares of Ambev S.A. (NYSE:ABEV) at the end of Q3 2024, with a total stake value of $522.4 million, a staggering 165% increase from the previous quarter.
8. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 26
Next on our list of the Best Alcohol Stocks to Invest In is Diageo plc (NYSE:DEO), a British multinational alcoholic beverage company with its headquarters in London, England. With a vast array of brands in over 180 countries, Diageo’s competitive edge stems from the sheer breadth of its portfolio in a range of markets around the world. This provides the industry giant with a solid foundation for strategic realignment and a strong buffer against market volatility associated with luxury goods. It also enables it to find opportunities to roll out more accessible product lines or bring innovation to the ‘everyday luxury’ segment.
Moreover, Diageo plc (NYSE:DEO)’s evolving strategy revolves around pivoting away from its ‘affordable luxury’ narrative towards a more conventional staples business model, demonstrating that the company has been adapting to broader industry trends, favoring stability and consistent performance over the potential volatility of luxury markets.
Diageo plc (NYSE:DEO) has very strategically kept up with the rapidly growing non-alcoholic trend. Its Guinness 0.0 brand has achieved massive success in only four years since its launch and is already counted among the Best-Selling Non-Alcoholic Beers in the US. In fact, the NA offering has witnessed an almost 50% increase in sales between the end of February 2023 and the end of February 2024, according to Food Manufacture. The company has also recently acquired Ritual Zero Proof Non-Alcoholic Spirits, the bestselling booze-free spirits brand in America.
However, Diageo plc (NYSE:DEO) could be among the companies that stand to lose when Donald Trump takes office next month. The President-elect has stated that he intends to slap 25% tariffs on imports from Mexico and Diageo subsidiaries shipped over 25 million liters of tequila from Mexico to the US last year, including brands such as Don Julio, Casamigos, etc. The spirits-maker relies heavily on tequila for sales growth in the US and the rumored upcoming tariffs could pose a significant problem.
That said, Diageo plc (NYSE:DEO) is a gigantic multinational firm that enjoys a robust financial position with more than $20 billion in revenues for the past couple of years. Moreover, Diageo plc (DEO) is also one of the Best Alcohol Stocks for Dividends, as the company stood up to its reputation as a very reliable dividend payer for decades and increased its full-year dividend by 5%, maintaining its track record of dividend increases since fiscal year 2000.
Aristotle Capital Management, LLC, an investment management company, said the following about DEO in its Q3 2024 investment letter:
“Headquartered in London, England, Diageo plc (NYSE:DEO) is a global leader in the alcoholic beverages industry. The company has a vast portfolio of over 200 well-recognized premium spirits (~80% of FY 2024 sales), beers (~15% and mostly Guinness) and other beverages (~5%) that are sold in nearly 180 countries. Led by its Johnnie Walker brand, Diageo is the world’s largest exporter of Scotch whiskey—its largest category at ~25% of sales—followed by other spirits such as tequila and vodka (~10% each). Diageo also owns a ~34% stake in the premium champagne and cognac maker Moët Hennessy (a subsidiary of LVMH Moët Hennessy Louis Vuitton).
The company is the product of the 1997 merger between Grand Metropolitan and Guinness and the subsequent divestiture of its food-related businesses. M&A continues to be a part of Diageo’s strategy, as regional brands often dominate local markets (which provides further opportunities for mergers and industry consolidation). Over the last decade, Diageo has also meaningfully increased its presence in the rapidly growing tequila market with the acquisitions of Don Julio and Casamigos…” (Click here to read the full text).
7. Anheuser-Busch InBev Sa/NV (NYSE:BUD)
Number of Hedge Fund Holders: 26
Anheuser-Busch InBev SA/NV (NYSE:BUD) is the Largest Beer Company in the World with a global production volume of 585 million hectoliters and a revenue of $59.38 billion in 2023, an increase of over 2.7% from the previous year.
The brewing giant came under fire in the American market last year after the controversy regarding its best-selling brand Bud Light, which resulted in the brand losing its crown as the Top-Selling Beer in America after nearly two decades. Anheuser-Busch InBev SA/NV (NYSE:BUD)’s sheer size and the breadth of its portfolio give it some protection from a single brand falling out of favor and so despite the Bud Light setback, the company’s overall beer portfolio gained volume share in the US in Q3 of 2024. In fact, Michelob Ultra, another one of AB InBev’s brands, is now the top-selling draft beer in America.
Moreover, to reignite its beer business, Anheuser-Busch InBev SA/NV (NYSE:BUD) has leaned into the non-alcoholic beer category, and its Bud Zero and Corono Cero brands have gained massive popularity through partnerships with mega events like the Olympics and the FIFA World Cup 2022. The company gained market share of NA beer in over 60% of its key markets in Q3 of 2024, with Corona Cero more than doubling both volumes and revenues.
Anheuser-Busch InBev SA/NV (NYSE:BUD) boasts a strong presence in around 150 markets around the world and its globalization strategy seems to be paying off. In Q3 of 2024, the company witnessed volume increase in 50% of its markets and revenue growth in 60% of its markets globally. To return value to its shareholders, AB InBev has also recently announced a $2 billion share buyback program to be executed within the next 12 months.
Thanks to its deep pockets and global influence, Anheuser-Busch InBev SA/NV (NYSE:BUD) can market its products on the biggest of scales and forge strong partnerships. It was announced last month that the brewing company has extended its partnership with FIFA to include the FIFA Club World Cup 2025, taking place in the US in July. AB InBev is also a sponsor of FIFA World Cup 2026, which will be jointly hosted by 16 cities across Canada, Mexico, and the United States.
6. The Boston Beer Company, Inc. (NYSE:SAM)
Number of Hedge Fund Holders: 28
Ranking at number 6 in our list of the Best Alcohol Stocks to Buy Now is The Boston Beer Company, Inc. (NYSE:SAM), one of the largest American-owned brewing companies, best known for its flagship brands such as Samuel Adams and Truly Hard Seltzer.
Although it was among the pioneers of America’s craft brewing revolution, The Boston Beer Company, Inc. (NYSE:SAM) isn’t the small business it once was. The company declared in its Q3 2024 earnings call transcript that it had generated over $200 million in operating cash flow YTD and maintained a cash balance of $256 million at the end of the third quarter with no debt, a rarity among the massive global beer conglomerates. To return value to its shareholders, BBC has repurchased $191 million in shares this year by the end of Q3 and recently even expanded its share repurchase authorization by $400 million, bringing the total repurchase agreement to $1.6 billion.
However, The Boston Beer Company, Inc. (NYSE:SAM)’s core brands have not been doing so well lately. The company’s iconic Samuel Adams beer has seen its sales sliding for almost a decade now. The Truly Hard Seltzer brand was also down around 23% YTD through Oct. 6, according to scan data for off-premise sales by market research firm Circana. The beer-maker’s $300 million investment in Dogfish Head Brewery doesn’t seem to be going according to plan either and it has already written down around $85 million of the floundering Delaware firm, including an impairment charge of $41.2 million in the last quarter.
That said, The Boston Beer Company, Inc. (NYSE:SAM)’s key success factors include its ability to innovate, enhance supply chain efficiencies, and allocate resources strategically. As the craft beer market continues its decline, the company is focused on diversifying its portfolio of products by including flavored malt and hard seltzers, among others. BBC also recently launched a distinctly American light craft lager called Samuel Adams American Light, to make sure it keeps up with the ongoing no-lo trend. The company also continues to dominate the hard tea category and its Twisted Tea Brand enjoys a strong 85% market share, with the most successful competitive brand limited to a low single-digit share in the market.
SouthernSun Asset Management LLC stated the following about The Boston Beer Company, Inc. (NYSE:SAM) in its Q1 2024 investment letter:
“In the near term, we believe the company will remain focused on sustaining Twisted Tea’s growth, turning Truly volume trends, improving operations to enhance gross margins, and thus providing more funds to invest in its core assets as a company – its brands and its sales force. Overall, we remain confident management’s efforts and investments are likely to produce profitable growth that will reward investors over time.”
5. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 32
Altria Group, Inc. (NYSE:MO) is an American tobacco company that manufactures a wide range of related products including cigarettes and other nicotine products. Though not directly involved in brewing itself, the company owns a significant stake in Anheuser-Busch, the largest beer company in the world.
Billy Gifford, CEO of Altria Group, Inc. (NYSE:MO), recently stated:
“Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”
However, Altria Group, Inc. (NYSE:MO)’s primary focus remains the tobacco industry, or rather on selling traditional cigarettes within the US market. It operates exclusively in North America and holds control over Marlboro, the most popular cigarette brand in the region. The company also boasts a robust smoke-free product portfolio, particularly oral nicotine pouches, and heated tobacco products.
Altria Group, Inc. (NYSE:MO) announced the acquisition of e-cigarette maker NJOY last year and it seems the investment is going well. The company has been able to grow that business very quickly as it pushed the new product through its strong distribution network. In Q3 of 2024, NJOY consumables shipment volume grew more than 15% YoY to 10.4 million units, while NJOY device shipment volume for the quarter nearly tripled versus the prior year to 1.1 million units and was 3.9 million units for the first nine months. However, Altria’s cigarette volumes have been declining consistently over the last few years and the NJOY business is nowhere near large enough to offset the troubling downturns in its core business. The company has been able to balance volume declines with price increases, but the decreasing market share of its Marlboro brand means that consumers are likely shifting to cheaper ways to consume nicotine.
Altria Group, Inc. (NYSE:MO) remains committed to its shareholders and paid $1.7 billion to shareholders through dividends in Q3. In fact, the company has raised its payouts 59 times in the last 55 years and is included in our list of the Top 15 Dividend Kings. Altria also repurchased 13.5 million shares for $680 million in Q3.
Altria Group, Inc. (NYSE:MO) stock has emerged as an impressive winner this year and has gained almost 26% this year, primarily due to a better-than-anticipated quarterly performance driven by growth in its oral tobacco products.
Ashva Capital stated the following regarding Altria Group, Inc. (NYSE:MO) in its Q3 2024 investor letter:
“At Ashva Capital, our focus on intrinsic value–rather than market sentiment or temporary price metrics– sets our portfolio apart from peers. For example, we hold Altria Group, Inc. (NYSE:MO), which has demonstrated resilience and strong performance within our portfolio, particularly following a robust Q3 earnings report. Altria’s results highlighted increased demand for smokeless products, underscoring both the adaptability of its business model and its long-term growth potential—a key factor in our investment decision.
This approach to intrinsic value echoes insights from renowned value investor Bill Miller, whose strategy emphasized fundamental value over market-driven factors. Key principles from Miller’s approach that inform our strategy include:..” (Click here to read the full text)
4. Molson Coors Beverage Company (NYSE:TAP)
Number of Hedge Fund Holders: 34
Molson Coors Beverage Company (NYSE:TAP) is a global beverage and brewing giant with a diverse portfolio that includes a variety of beer brands, spirits, and non-alcoholic beverages. With a 4.4% share of the global beer production, Molson Coors is the 5th-largest brewer in the world. The company’s diversified portfolio includes a wide selection of beers in multiple price categories, going from core brands like Coors Light and Miller Light, premium brands like Madri and Blue Moon, right down to economy brands like Miller Higher Life, Keystone, and Icehouse.
Molson Coors Beverage Company (NYSE:TAP) was among the top gainers from the Bud Light controversy last year but those gains seem to be coming to an end. The company had a tough Q3 2024 as net sales declined 7.8% YoY to reach $3.04 billion, missing the analysts’ estimates by over $89 million. Its US financial volume also dropped by 17.9%. However, the beer producer’s core brands remain healthy. According to Circana, in the US, Coors Light, Miller Lite, and Coors Banquet retained a substantial portion of their combined volume share gains in Q3 versus a year ago, when we saw strong share increases. It must also be kept in mind that Molson Coors has consistently increased its revenue over the last 4 years, from $9.65 billion in 2020 to $11.7 billion in 2023, while the Bud Light controversy only happened last year.
Molson Coors Beverage Company (NYSE:TAP) recognizes changing consumer preferences and the challenges faced by the global beer landscape. As such, it has undertaken several strategic initiatives to reshape its brand portfolio and focus on higher-margin segments. These include the divestiture of some of its craft beer brands and the active investments in its premium Beyond Beer portfolio. One such example is the company’s acquisition of the cult favorite high-end Bourbon and rye whiskey brand, Blue Run Spirits, last year.
Molson Coors Beverage Company (NYSE:TAP) also offers a fair dividend yield and has been active in share buybacks, resulting in a shareholder yield of approximately 6% if maintained. The company generated $856 million in underlying free cash flow for the first nine months of 2024 while investing meaningfully in its business and returning $717 million in cash to shareholders through both dividends and share repurchases. While TAP may not be a high-growth stock, it positions itself as a defensive investment that could perform relatively well during economic downturns.
3. Monster Beverage Corporation (NASDAQ:MNST)
Number of Hedge Fund Holders: 35
Next in our list of the Best Alcohol Stocks is one of the biggest names in the global energy drinks market, Monster Beverage Corporation (NASDAQ:MNST), known for brands like Monster Energy, Relentless, and Burn. The American beverage forayed into the beer sector in 2022 when it acquired the CANarchy Craft Brewery Collective in a deal worth $330 million. The acquisition gave Monster ownership of CANarchy’s craft breweries including Cigar City, Oskar Blues, Deep Ellum, Perrin Brewing, Squatters, and Wasatch.
Monster Beverage Corporation (NASDAQ:MNST) is facing challenges in its home country, as the energy drinks market in the US has shown signs of weakness. However, despite these issues, the company has managed to improve its market share in the domestic market both in volume and dollar terms, indicating that Monster’s brand strength and aggressive marketing strategies are effective in maintaining its competitive edge.
Monster Beverage Corporation (NASDAQ:MNST)’s globalization strategy also seems to be paying off as international sales now account for approximately 40% of its total revenue. The geographic diversification also reduces the company’s reliance on the tough domestic market, where it faces increasing competition from local brands. Monster’s partnership with Coca-Cola’s global distribution network also provides it with a significant competitive edge in international markets. However, while a globalized portfolio is beneficial to most firms, it also carries its risks and Monster took a significant revenue hit from the ongoing hyperinflation in Argentina.
Monster Beverage Corporation (NASDAQ:MNST) also remains committed to innovation and has recently launched several new drink flavors including Monster Energy Ultra Vice Guava and Oskar Blues NA beer in the US, Monster Ultra Peachy Keen in Mexico, and Monster Ultra Violet in Australia, among many more.
Monster Beverage Corporation (NASDAQ:MNST) still needs time to develop its beer business though, as net sales of its Alcohol Brands segment declined by 6% in Q3 of 2024, primarily due to the decreased sales by volume of craft beers. That said, the company remains committed to returning value to its shareholders and repurchased $534.7 million worth of its common stock during the quarter.
2. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 36
Constellation Brands, Inc. (NYSE:STZ) is involved in the production, import, marketing, and sale of beer, wine, and spirits across the United States, Canada, Mexico, New Zealand, and Italy. The company made headlines last summer when its Mexican beer brand, Modelo Especial, became the Best-Selling Beer in America after dethroning Bud Light.
Constellation Brands, Inc. (NYSE:STZ)’s beer business continues to flourish and in Q2 2025, its beer segment (responsible for raking in the lion’s share of its revenue) continued to deliver strong financial performance with net sales and operating income growth of nearly 6% and 13%, respectively. Its core brands continued their growth during the quarter as Modelo Especial grew by 11%, while Pacifico surged by 21%. In addition to the sales uptick, the beer segment has also been witnessing a consistent improvement in margin expansion, highlighting the company’s ability to drive profitability alongside volume growth.
Another factor favoring Constellation Brands, Inc. (NYSE:STZ) is that America’s Hispanic population (a segment that makes up over 50% of the company’s client mix) is growing almost twice as fast as its general population, so brands like Modelo, Pacifico, and Corona are expected to stay in high demand.
The wine and spirits segment of Constellation Brands, Inc. (NYSE:STZ) continues to suffer and saw its net sales decline by 12% during the second quarter. Though it only accounts for less than 10% of overall earnings, the company recently wrote down the value of its wine and spirits business, taking a $2.5 billion charge. It was announced earlier this month that Constellation will sell its Svedka vodka to Sazerac, as the Corona maker looks to focus on premiumizing its wine and spirits portfolio.
Since its core beer brands come from across the southern border, Donald Trump’s 25% tariff on imports from Mexico could pose a serious threat to the continued growth of Constellation Brands, Inc. (NYSE:STZ). Hence, the company is making sure it has adequate inventory in place here before the President-elect takes office. It is also assessing cutting costs elsewhere to absorb the tariffs, or incrementally raising its prices, but that will come with its risks.
1. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Number of Hedge Fund Holders: 38
With 38 hedge fund investors in the IM database in Q3 2024, Keurig Dr Pepper Inc. (NASDAQ:KDP) is the Best Alcohol Stock According to Hedge Funds. KDP is a leading beverage company in North America, with a portfolio of more than 125 owned, licensed, and partner brands and powerful distribution capabilities. Though not a brewing company itself, Keurig Dr Pepper Inc. (NASDAQ:KDP) made inroads into the beer business when it acquired a $50 million stake in the non-alcoholic beer producer Athletic Brewing in 2022. The investment represented the beverage giant’s diversification into the rapidly emerging beverage categories and followed its acquisition of the NA ready-to-drink cocktail brand Atypique.
Keurig Dr Pepper Inc. (NASDAQ:KDP)’s shopping spree still continues, as it has recently reached an agreement to purchase a majority stake in energy-drink maker GHOST for $990 million, with plans to purchase the rest in 2028. The brand will become a part of KDP’s US refreshment beverages segment, which made up nearly 60% of its total sales last year. However, the acquisition comes at a time when the energy drink category has slowed down in the US, largely due to weak traffic at convenience stores.
Tim Cofer, CEO of Keurig Dr Pepper Inc. (NASDAQ:KDP), stated:
“GHOST is a differentiated brand with significant growth potential, and we are excited to partner with its founders to take the business to the next level. This acquisition strengthens our position in the attractive energy drink category, accelerating our portfolio evolution toward consumer-preferred, growth-accretive spaces through a disciplined deal structure.”
Keurig Dr Pepper Inc. (NASDAQ:KDP) gains a significant competitive advantage through its consumer-focused innovation model, household penetration, and loyalty. A great example is how the company transformed the way consumers brew coffee through the introduction of the K-Cup pod single-serve coffee system. The recent launch of K Brew + Chill also exemplifies KDP’s commitment to innovation in response to changing consumer preferences.
Keurig Dr Pepper Inc. (NASDAQ:KDP)’s core refreshment segment, which includes Dr. Pepper, Snapple, Canada Dry, and Sunkist, continued to perform well in Q3 2024, with revenue jumping 5.3% YoY to $2.4 billion. In fact, Dr Pepper even overtook Pepsi for the No. 2 soda market share spot in the US by volume, driven by the use of popular limited-time offerings.
Keurig Dr Pepper Inc. (NASDAQ:KDP)’s cash generation has also strengthened and it is dynamically allocating this cash flow to support multiple parallel priorities. The company generated more than $500 million in free cash flow during Q3, keeping it on track for a meaningful step-up in full-year cash flow compared to 2023. KDP also announced a 7% dividend increase during the quarter, marking its fourth consecutive year of dividend growth and underscoring its commitment to direct shareholder returns.
Overall, Keurig Dr Pepper Inc. (NASDAQ:KDP) ranks first on our list of the best beer stocks. While we acknowledge the potential for KDP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KDP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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