Legendary host Jamie Foxx backs his Brown Sugar Bourbon to bring ‘sweet life to the party’. No doubt he’s also keen to surpass the million case milestone reached by Casamigos Tequila last year, founded by George Clooney and sold in 2017 to Diageo (DEO). But as worry of a potential recession ahead increases and Russian-named vodka battles to stay on shelves, it seems there are plenty of people in alcohol’s corner, regarding its stocks as being resistant to market downturns.
This could be because despite a slight dip in drinking throughout the 2008 global recession, during the Covid years the bubbles were free-flowing in our, erm, bubbles. Probably likely in large part to ubiquitous online alcohol shopping accessibility and Zoom parties? According to University of Auckland research, in Aotearoa it was WFH Kiwi mums taking to the drink... feels. 🍷 Yet alcohol’s buzz doesn’t extend to generating rapid high growth for shareholders. Instead, thanks to a continuous cash flow pouring in from thirsty punters, alcohol stocks tend to stay slow ‘n’ steady, whatever the economic conditions.
Even ‘get rich slowly’ share market master, alcohol-free Warren Buffett may be fizzing with Dutch courage in 2022. This year one of his largest holdings, Coca-Cola, announced their partnership with Constellation Brands (STZ) to join the canned cocktail culture zeitgeist, launching Fresca Mixed RTDs. And 19% Coca-Cola-owned Monster Beverage (MNST) has been brewing plans to pre-load their beverages with craft beersies. The move for the sugary beverage category to pack more of a punch follows Pepsi (PEP) ending Dewhibition, releasing Hard MTN Dew after getting shaken not stirred with the US brewery company named for Founding Father and American revolutionary Samuel Adams, Boston Beer (SAM). 🍸
Meanwhile, the home of Bud, Anheuser-Busch (BUD) has been suffering a mighty hangover, with their share price up only US$18.63 since listing in mid-2009. Time for hair of the dog? 🍹