In this article, we are going to discuss the 11 best brewery and distillery stocks to buy now.
The true origin of alcohol is lost in the mists of history but the first signs of it show up around 7000 B.C., when a fermented drink was produced from honey and wild yeasts in ancient China. Alcohol is considered to have driven a significant portion of early societal development. In 1877, an archaeologist named James Death went so far as to suggest that the invention of beer even preceded the invention of bread. That might imply that the reason mankind ever settled down into an agricultural lifestyle was to produce enough grain for beer. In fact, even the oldest known recipe in the world is not for food, but how to make beer.
The Global Alcohol Industry:
In 2019, the global alcohol consumption, measured in liters of pure alcohol per person of 15 years of age or older, was 5.5 liters, which is a 4.7% relative decrease from 5.7 liters in 2010. As we mentioned in our article – 25 Largest Alcohol Companies in the World in 2023 – the global alcoholic beverages market size was valued at $1.62 trillion in 2021, and is projected to reach $2 trillion by 2031, with a CAGR of 2.2% during the forecast period.
The market is likely to be driven by the increasing global young-adult demographic, coupled with high disposable income and consumer demand for premium/super-premium products. Globally, beer drives the market for alcoholic beverages. Regionally, North America and Asia-Pacific are expected to dominate the market during the forecast period.
Alcohol As a Lucrative Investment Asset:
Rare whiskeys are incredible as investment vehicles. The Rare Whisky 101 Apex 1000 Index tracks whiskeys that are highly sought after for collection. It has gained over 391% since 2013, against 247% gains of S&P 500 for the same period. The RW Japanese 100 Index, on the other hand, includes 100 collector’s bottles from Japan, and since 2014, the index has seen gains of 417%. The index includes bottles like Ichiro’s Malt ‘Card’ Ace of Spades, Ace of Diamonds, and King of Hearts, among others.
Investing in Scotch Whisky:
The market for rare and collectable Scotch is growing, with many investors seeing it as a promising alternative to traditional assets like stocks and real estate. While a bottle of Johnnie Walker Masters of Flavour was on sale for $24,000 in early 2023, other bottles have sold at auction for millions.
There has also been a lot of interest in buying whisky casks recently – barrels of different sizes, which typically start at between $3,000 and $6,000. The simple idea is that the cask is held in storage for what can be decades, by which time it has matured into something that will have much greater value when it is ready to be bottled. In 2022, a forgotten cask of 1988 Macallan was sold for $1.2 million at auction, having originally been bought for just $6,000.
Cask whisky investment is low cost, hassle free, and very secure. Bound by a rigid set of HMRC rules, casks of single malt whisky have to remain within the boundaries of Scotland and in an HMRC bonded facility. There are literally hundreds of bonded warehouses in Scotland, providing vital income to many rural areas of the country.
Another advantage of investing in whisky casks is that it allows investors to potentially earn a larger profit as it is not subject to capital gains tax. Moreover, Pernod Ricard SA and Diageo plc have both recently announced plans to increase their whisky cask prices to counteract the rising costs in materials, energy, and transportation because of inflation. This rise in price and limited stock will only make whisky more desirable, creating a more valuable asset class.
With that said, here are the Top Brewery and Distillery Stocks.
Photo by Wil Stewart on Unsplash
Methodology:
To collect data for this article, we scanned Insider Monkey’s database of 933 hedge funds and picked the top 11 companies that operate in the brewing and distilling sectors with the highest number of hedge fund investors as of Q4, 2023. When two 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 Best Brewery and Distillery Stocks to Buy According to Hedge Funds:
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
11. Tilray Brands, Inc. (NASDAQ:TLRY)
Number of Hedge Fund Holders: 13
Tilray Brands, Inc. (NASDAQ:TLRY) – a craft beer and cannabis company that was among the first to be licensed for medical cannabis in Canada – announced last year that it had agreed to acquire eight beer and beverage brands from Anheuser-Busch InBev for an undisclosed amount.
The deal includes the Shock Top, Blue Point, 10 Barrel, Breckenridge, Redhook, Widmer Brothers, Square Mile Cider, and HiBall Energy brands. With the satisfaction of customary closing conditions last October, combined with the pro forma sales revenue from the acquired businesses, Tilray Brands, Inc. (NASDAQ:TLRY) is now expected to become the 5th largest craft beer business in the U.S. with a 5% market share.
Earlier this month, the Colorado-based Breckenridge Distillery, acquired by Tilray in 2021 in a deal worth $102.9 million, 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.
Tilray Brands, Inc. (NASDAQ:TLRY) owns multiple beverage brands and is also counted among the 12 Best Marijuana Stocks to Invest In.
10. Ambev S.A. (NYSE:ABEV)
Number of Hedge Fund Holders: 13
Ambev S.A. (NYSE:ABEV), formally Companhia de Bebidas das Américas, is a Brazilian brewing company now merged into Anheuser-Busch InBev. It offers beer under the brand names Skol, Brahma, Antarctica, Bohemia, Original, Quilmes, Paceña, Pilsen, Labatt Blue, Alexander Keith’s, Kokanee, and Guaraná Antarctica.
Stocks of Ambev S.A. (NYSE:ABEV) were held by 13 hedge funds at the end of Q4 2023 in the Insider Monkey database, with First Eagle Investment Management holding the largest stake of over 312.98 million shares, valued at $876.34 million.
Ambev S.A. (NYSE:ABEV) is a great alcohol penny stock to own and is included among the Goldman Sachs Penny Stocks: Top 12 Stock Picks.
9. MGP Ingredients, Inc. (NASDAQ:MGPI)
Number of Hedge Fund Holders: 21
If you’re a whiskey lover, you’ve almost certainly tried the offerings of MGP Ingredients, Inc. (NASDAQ:MGPI), knowingly or not. This Indiana distillery has fueled the modern American whiskey boom by supplying distillers like High West, Smooth Ambler, WhistlePig, Angel’s Envy, Bulleit, and many others.
The company has boasted a massive increase in revenue over the last few years. In 2019, MGP Ingredients, Inc. (NASDAQ:MGPI) declared a revenue of $362.75 million, while by 2023, the company’s revenue had jumped up to $836.52 million – an increase of over 130%. The company reported a net income of $30.75 million in the Q4 of 2023, up almost 37% from the same quarter of last year.
MGP Ingredients, Inc. (NASDAQ:MGPI) also announced in June 2023 that it had acquired the fan-favorite Penelope Bourbon brand in a $215.8 million deal, including incentives.
8. Brown-Forman Corporation (NYSE:BF-B)
Number of Hedge Fund Holders: 21
Brown-Forman Corporation (NYSE:BF-B) engages in the production, distillation, bottling, import, export, marketing, and sale of a wide range of alcoholic beverages. This includes spirits, wines, whiskeys, flavored liqueurs based on whiskey, pre-mixed and pourable products, cocktails, vodkas, tequilas, champagnes, brandy, Bourbons, and liqueurs.
For the first six months of the fiscal year, ended October 31st 2023, the company’s reported net sales increased 2% to $2.1 billion (+1% on an organic basis) compared to the same prior-year period. First half reported operating income increased 1% to $666 million (+1% on an organic basis) and diluted earnings per share decreased 1% to $0.98.
Shares of Brown-Forman Corporation (NYSE:BF-B) were held by 21 hedge funds at the end of Q4 2023 in the Insider Monkey database, with Fundsmith LLP holding the largest stake of over 11.65 million shares, valued at $665.37 million.
Brown-Forman Corporation (NYSE:BF-B) is included among the Best Liquor Stocks to Buy Now.
7. Anheuser-Busch InBev Sa/NV (NYSE:BUD)
Number of Hedge Fund Holders: 24
Anheuser-Busch InBev Sa/NV (NYSE:BUD) is the Largest Beer Producer by Volume in the World. The company had a production volume of 595 million hectoliters, or over 25% of the global beer production in 2022, with a revenue of $57.7 billion and a net income of almost $6 billion.
The beer behemoth faced some headwinds in the American market after the recent controversy regarding its best-selling brand Bud Light, which resulted in the iconic brand losing its crown as the Top-Selling Beer in America after nearly two decades. Nevertheless, billionaire Bill Gates’ portfolio managers decided to initiate a $96 million position in the firm during the second quarter of 2023.
Michel Doukeris, the CEO of Anheuser-Busch InBev Sa/NV (NYSE:BUD), said the following in the company’s Q3 Earnings Call Transcript:
“Our global momentum continued this quarter although was partially offset by the performance of our U.S. business. We delivered revenue growth of 5%, with our net revenue per hectoliter increasing by 9% as a result of pricing actions, ongoing premiumization and other revenue management initiatives. Total volumes declined by 3.4% as growth in our Middle America, Africa and APAC regions was primarily offset by performance in the U.S. and a soft industry in Europe. EBITDA increased by 4.1% and reached USD 5.4 billion. Underlying EPS was US$ 0.86, a $0.02 per share increase versus last year. In line with our capital allocation priorities, we have announced a US$3 billion bond tender, and we have also announced today that we will be proceeding with a US$1 billion share buyback program to be executed within the next 12 months.”
The Budweiser-maker is counted among the Best Brewery Stocks to Buy Now.
6. Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX)
Number of Hedge Fund Holders: 27
Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX), doing business as FEMSA, is a Mexican multinational beverage and retail company headquartered in Monterrey, Mexico. The company picked up a 20% stake in Heineken in 2010 but trimmed it to 14.8% in 2017.
Then it was again announced in May 2023 that FEMSA sold about $3.63 billion of its shares in the Heineken Group, divesting its stake in the Dutch brewer as it plans to focus on its main businesses.
Shares of Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX) were held by 27 hedge funds at the end of Q4 2023 in the Insider Monkey database, with First Eagle Investment Management holding the largest stake of about 9.97 million shares, valued at around $1.3 billion.
Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX) is a Good Beer Stock to Buy Right 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.
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Disclosure: None. 11 Best Brewery and Distillery Stocks to Buy Now is originally published on Insider Monkey.
