In this article, we are going to discuss the 5 best brewery and distillery stocks to buy now. If you want to check out our detailed analysis of the global alcohol industry, alcohol as a lucrative investment asset, and investments in Scotch whisky, head to 11 Best Brewery and Distillery Stocks to Buy Now.
5. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 28
Diageo plc is a British multinational alcoholic beverage company with its headquarters in London, England. With over 200 brands sold in more than 180 countries, Diageo is the Largest Spirits Company in the World. The company’s portfolio has remarkable breadth across spirits and beer, with brands such as Guinness, Captain Morgan, Johnnie Walker, and Smirnoff etc.
Diageo is reportedly seeking a buyer for a trio of its brands as it looks to restore its profits and increase its value for shareholders. The owner of Guinness and Baileys has hired financial service group Rothschild to explore the sale, which includes Pimm’s, fruit liqueur brand Safari, and Pampero rum. Each brand could be offloaded individually or as a three.
Fiduciary Management Inc. (FMI), an independent money management firm, featured Diageo plc (NYSE:DEO) in the Q4 2023 investor letter, and made the following statement:
“Diageo plc (NYSE:DEO) is the #1 player in the large and attractive global spirits industry, with #1 positions in Scotch, Tequila, Gin, Vodka, and Rum. Total Beverage Alcohol (TBA) is a $950+ billion market, with Diageo at 4.7% of TBA, and aspiring to 6% by 2030. Premiumization in spirits is value creating, and Diageo owns 9 of the top 30 global brands, including Johnnie Walker, Tanqueray, Smirnoff, and Guinness. 12 of Diageo’s top brands are over 140 years old. The company has strong exposure to growth in emerging markets (38% of sales) and has proven to be a superior brand builder. The Diageo portfolio has been optimized, with limited reliance on M&A over the last decade. Capital allocation has been shareholder friendly. Following a period of post-COVID inventory destocking, Diageo trades at its lowest valuation in 10 years.”
4. The Boston Beer Company, Inc. (NYSE:SAM)
Number of Hedge Fund Holders: 29
The Boston Beer Company, Inc. (NYSE:SAM) is one of the largest American-owned brewing companies, best known for its line of all-malt beers under the brand name Samuel Adams. The company currently has a market cap of $4.32 billion and boasted a revenue of $2.09 billion in 2022.
SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” fourth quarter 2023 investor letter recently and stated the following regarding The Boston Beer Company, Inc. (NYSE:SAM):
“The Boston Beer Company, Inc. (NYSE:SAM), a leading provider of alcohol beverages, was one of the bottom performers in the Small Cap strategy. The company reported slight net revenue growth for the third quarter of 2023, led by strong growth in the Twisted Tea brand, offset by declines in the Truly brand. SAM continues to extend existing brands (e.g. the continued national rollout of Twisted Tea Light), replace struggling flavors (e.g. increasing the shelf and marketing presence of Truly’s more popular, lighter flavors) and launch new brands that we believe will produce good, though uneven, results over the long term. For the second quarter in a row, margins expanded, as the company benefited from operational margin improvement initiatives, as well as deflation in freight costs. Management is steering a multi-year effort to enhance the efficiency of its operations that we believe is likely to produce sustainable margin improvement. SAM has a strong balance sheet, with net cash, and management is directing excess cash flow toward share repurchases. Overall, we remain confident management’s efforts to grow the brands, improve the efficiency of operations, and allocate the company’s capital will reward investors over time.”
3. Monster Beverage Corporation (NASDAQ:MNST)
Number of Hedge Fund Holders: 42
Monster Beverage Corporation (NASDAQ:MNST) is an American beverage company that manufactures energy drinks including Monster Energy, Relentless, and Burn. It was announced in 2022 that the beverage giant had 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.
The company spent the early weeks of 2023 rolling out a line of alcoholic beverages. Called The Beast Unleashed, the drinks are made with malt alcohol and contain 6% alcohol by volume, though no caffeine or energy-inducing ingredients.
On the 31st of January 2024, Monster Beverage Corporation (NASDAQ:MNST) announced that effective immediately, CANarchy Craft Brewery Collective would operate under the name Monster Brewing Company. CANarchy’s new alcohol products, The Beast Unleashed™ and Nasty Beast™ Hard Tea, now represent the majority of the California-based company’s alcohol beverage sales. This change will better align the business with Monster’s brand equity, particularly as these products are expected to continue to play an increasingly important role in CANarchy’s future activities.
2. Molson Coors Beverage Company (NYSE:TAP)
Number of Hedge Fund Holders: 43
Molson Coors Beverage Company (NYSE:TAP) is a multinational beverage and brewing company that engages in the production, marketing, and sale of beer, malt beverage products, and now also spirits across multiple regions including the Americas, Europe, the Middle East, Africa, and the Asia Pacific. For Q4 2023, reported underlying earnings of $1.5 billion before taxes for 2023, up 39% YoY. Full-year revenue also rose 9% to $11.7 billion.
However, after having such a stellar year, Molson Coors has been under the spotlight this week after more than 400 Teamsters are on strike at the company’s brewery in Fort Worth, Texas, impacting production for North America’s second largest brewer. The union claims the company’s offer was “insulting” considering how well it is doing financially, offering less than a $1 per hour wage increase for the majority of Teamsters members.
1. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 53
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 Top-Selling Beer in America after dethroning Bud Light.
The investment community will be closely monitoring the performance of Constellation Brands in its forthcoming earnings report. It is anticipated that the company will report an EPS of $2.13, marking a 7.58% rise compared to the same quarter of the previous year. Last month, Morgan Stanley analyst Dara Mohsenian praised Constellation Brands, Inc. (NYSE:STZ)’s earnings and valuation. The analyst expects solid beer volumes in the future.
Constellation Brands, Inc. (NYSE:STZ) is the Best Alcohol Stock to Buy in our list.
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also take a peek at 25 Most Cannabis Consuming Countries in the World and Alcohol Consumption by Country: 25 Countries with the Highest Alcohol Consumption per Capita.
