Best Alcohol Stocks Right Now

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Contributor, Benzinga
September 14, 2023

Are you looking to invest in the alcohol industry? With the growing popularity of alcoholic beverages, it's no surprise that alcohol stocks have become an attractive option for investors. But with so many options out there, how do you know which alcohol stocks are the best ones to invest in?

The alcohol industry is a lucrative market, with global alcohol sales reaching billions of dollars each year. From beer and spirits to wine and craft cocktails, you can choose from a wide range of alcoholic beverages. As a result, the alcohol industry has seen significant growth, making it an appealing sector for investors.

To help you make informed investment decisions, Benzinga has compiled a list of the best alcohol stocks that show promising potential for growth and profitability. Whether you're a seasoned investor or just starting out, this article offers valuable insights into the top alcohol stocks to consider for your investment portfolio.

Best Alcohol Stocks to Watch

Stock Movers

Gainers

TickerCompany±%Buy Stock
MGPIMGP Ingredients$80.330.85%211KBuy/Sell
SAMBoston Beer Co$280.620.1%184.4KBuy/Sell
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Loser

TickerCompany±%Buy Stock
WVVIWillamette Valley$4.00-4.99%4.5KBuy/Sell
SBEVSplash Beverage Group$0.28-2.09%170KBuy/Sell
ABEVAmbev$2.38-1.66%13.6MBuy/Sell
BUDAnheuser-Busch InBev$66.65-1.15%2.2MBuy/Sell
NAPADuckhorn Portfolio$8.10-0.98%1.1MBuy/Sell
DEODiageo$141.67-0.52%710.3KBuy/Sell
MCMoelis$56.41-0.45%634.8KBuy/Sell
TAPMolson Coors Beverage$56.27-0.36%1.8MBuy/Sell
STZConstellation Brands$254.65-0.31%1.2MBuy/Sell
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Session: May 17, 2024 4:00PM EDT - May 20, 2024 9:39AM EDT

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What Are Alcohol Stocks?

Alcohol stocks represent ownership in companies that produce, distribute and sell alcoholic beverages, including beer, wine, spirits and other related products. Companies involved in this industry range from large multinational conglomerates to small independent brewers.

Benefits of Investing in Alcohol Stocks

Alcohol stocks offer investors the potential for good returns as well as stability. Here are other potential benefits:

  • High demand: Alcohol is a popular and widely consumed product, making it a stable and profitable industry to invest in. Regardless of economic conditions, people tend to continue purchasing alcohol, making it a recession-resistant investment.
  • Steady revenue growth: The alcohol industry has demonstrated consistent revenue growth over the years. As populations increase and consumers' disposable incomes rise, the demand for alcohol is expected to continue growing, leading to potential revenue growth for alcohol stocks.
  • Resilience during economic downturns: Even during economic downturns, alcohol stocks tend to perform relatively well. People often seek comfort or relaxation in alcohol during challenging times, making it a defensive investment option.
  • Global market opportunities: Alcohol stocks provide opportunities for global investments. Many alcoholic beverage companies have a global presence and can benefit from international markets, diversifying their revenue streams and potentially increasing profitability.
  • Dividend potential: Alcohol companies often have a history of paying dividends to shareholders, which can be attractive for investors seeking regular income from their investments.
  • Mergers and acquisitions: The alcohol industry has seen significant mergers and acquisitions in recent years. Consolidation can create opportunities for investors, as larger companies may have increased market share and potential for growth.

Risks of Investing in Alcohol Stocks

Despite its stability and relative safety compared to other sectors, some risks are associated with investing in alcohol stocks.

  • Regulatory changes: The alcohol industry is subject to strict regulations, and changes in laws and regulations can significantly impact the profitability and operations of alcohol companies. Possible shifts include changes in taxation, licensing requirements, advertising restrictions and age verification laws.
  • Consumer preferences: Consumer preferences and trends can change rapidly, and investing in alcohol stocks carries the risk of a decline in demand for certain types of alcoholic beverages. Shifts in consumer preferences towards healthier lifestyles or alternatives to alcohol could negatively impact the profitability of alcohol companies.
  • Economic downturns: Alcohol consumption is often considered discretionary spending, meaning that during economic downturns or periods of financial instability, consumers may cut back on their alcohol consumption. Lower consumption can result in decreased sales and profitability for alcohol companies.
  • Legal and liability risks: The alcohol industry faces legal risks related to potential lawsuits and liability claims. Issues include drunk driving accidents, health risks associated with alcohol consumption and allegations of false advertising or misrepresentation.
  • Reputation and brand risks: Alcohol companies rely heavily on their brand image and reputation. Negative publicity, such as product recalls, scandals or associations with harmful behavior, can damage a company's brand and result in decreased sales and profitability.

What to Look for in Alcohol Stocks

When looking for investments in alcohol-related stocks it’s important to do your research and understand the company’s business model as well as its financial position before investing.

Here are some key things to look for when investing in alcohol stocks.

Industry Performance

Research the overall performance of the alcohol industry. Look for trends and growth patterns, as well as potential challenges or risks that could impact the industry as a whole.

Company Financials

Examine the financial health of the alcohol company you are considering investing in. Look at their revenue, profit margins and debt levels. Assess their ability to generate consistent earnings and manage their financial obligations.

Brand Strength

Evaluate the strength and reputation of the alcohol company's brands. Consider their market share, customer loyalty and brand recognition. A strong and well-known brand can provide a competitive advantage and contribute to long-term growth.

Distribution Networks

Assess the company's distribution networks and partnerships. Look for companies with extensive distribution channels, both domestically and internationally. A strong distribution network can help the company reach a larger customer base and increase sales.

Regulatory Environment

Understand the regulatory environment surrounding the alcohol industry. Consider potential changes in regulations or policies that could impact the company's operations and profitability. Stay informed about licensing requirements, taxes and legal restrictions that may affect the industry.

Stay updated on consumer trends and preferences within the alcohol industry. Look for companies that are adapting to changing consumer tastes and preferences. Consider the demand for different types of alcohol, such as craft beers, spirits or non-alcoholic beverages.

Competitive Landscape

Analyze the competitive landscape within the alcohol industry. Identify the company's main competitors and assess their market positioning. Look for companies that have a competitive advantage, such as unique products, strong distribution networks or innovative marketing strategies.

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Investing in the Alcohol Market

When investing in alcohol stocks, consider industry performance, company financials, brand strength, distribution networks, regulatory environment, consumer trends, competitive landscape, global expansion opportunities, sustainability and corporate social responsibility initiatives and expert opinions. Conducting thorough research and gathering multiple perspectives will help you make informed decisions when investing in alcohol stocks.

Frequently Asked Questions 

Q

Are alcohol stocks a good investment?

A

It depends on various factors such as market conditions, individual risk tolerance and investment goals. Alcohol stocks can be a good investment for those who believe in the long-term stability and growth of the industry.

Q

Do alcohol stocks do well in a recession?

A

Alcohol stocks typically perform relatively well during a recession because alcohol is considered a consumer staple, meaning it is a product that people continue to purchase even during economic downturns.

Q

Is Investing in alcohol profitable?

A

Investing in alcohol can be profitable, as the alcohol industry can be a lucrative and constantly growing market.