Beer drinkers are a dying breed. Everyday they are replaced by a growing class of cocktail fanatics, wine connoisseurs, casual drinkers, and mixed-drink fans.
"This trend is irreversible," said Jan Vesely, director of the Czech Beer and Malt Association, whose members account for 90% of the region's market. "If we want to keep (up production) we must go to other drinks or exports." You can almost hear the defeat in his voice. (via Reuters)
And understandably so. Czech Republic is a mecca for beer drinkers and brewers. It's a magical land where beer is cheaper than a bottle of water and served with every meal. So if top brewers in the capital city are admitting defeat to the latest drinking trends, we can be assured the final Western stronghold has been breached.
"Domestic beer drinking has fallen to current per capita consumption of 144 liters a year from 160 liters in the mid 2000s, but still tops the world beer drinking rankings," reports Reuters.
According to Reuters, an economic downturn and healthier consumption habits have quietly turned the industry on its heels. Young professionals are looking for light and refreshing drinks during nights out, and seem to prefer the 2% alcohol content over the regular 4%+ in regular brews.
There's also a higher "classier" stigma to wine and cocktails that beer often lacks. Thus, as nations modernize and increase demand for higher quality products, a classic beer is a natural loser in the alcohol marketing war.
In Prague "brewers are tailoring their products for a post-communist generation more at ease with sugary soft drinks than lager in order to cope with a drop in domestic consumption." Think beers mixed with sodas lemonade, and fruit juice.
The same has been true to the United States for the past few years, as brewers desperately pumped out cotton candy flavored vodkas, sugary wine coolers and slapped on celebrity endorsements in an attempt to win back a declining customer base.
On The Bright Side..
Once considered a crime against humanity, introducing sugary beers to the market is now common practice. Vesley submits to the idea that "booming" mixed drink sales are "an added dimension to the Czech beer culture."
Business Section: Investing Ideas
Perhaps a key statistic for interested investors to note is Vesely's estimates of the non-beer beer market: He believes it will grow to 5% of the region's market share by 2014, up from around 2% now, and 0% in 2010.
A 5% increase in mixed beers is no joke. So let's turn our sights to American brewers and see what they are doing to capture this market shift at home.
We list below names that offer a variety of alcoholic products that we think put it in a position to benefit from the current trends.
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:
1. Anheuser-Busch InBev (BUD, Earnings, Analysts, Financials): Engages in brewing and selling beer in North America, Latin America, Europe, and the Asia Pacific. Market cap at $130.26B, most recent closing price at $81.09. The company offers a portfolio of approximately 200 beer brands. Its global brands include Budweiser, Stella Artois, and Beck's; multi-country brands consist of Leffe and Hoegaarden; and local brands comprise Bud Light, Michelob, Skol, Brahma, Antarctica, Quilmes, Jupiler, Hasseroder, Klinskoye, Sibirskaya Korona, Chernigivske, Harbin, and Sedrin. The company also produces and distributes soft drinks.
2. Boston Beer Co. Inc. (SAM, Earnings, Analysts, Financials): Produces and sells alcohol beverages primarily in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico. Market cap at $1.44B, most recent closing price at $111.15. The company sells approximately 50 beers under the Samuel Adams or the Sam Adams brand names; 7 flavored malt beverages under the Twisted Tea brand name; 3 hard cider beverages under the Angry Orchard brand name; and 1 hard cider under the HardCore brand name.
3. Molson Coors Brewing Company (TAP, Earnings, Analysts, Financials): Distributes beer brands. Market cap at $7.99B, most recent closing price at $44.17. The company sells various brands in the United States comprising Coors Light, Miller Lite, Coors Banquet, Miller Genuine Draft, Miller 64, Miller Chill, Sparks, Miller High Life, Keystone, Icehouse, Mickey's, Milwaukee's Best, Hamm's, Old English 800, Blue Moon, Henry Weinhard's, George Killian's Irish Red, Leinenkugel's, Peroni Nastro Azzurro, Pilsner Urquell, Grolsch, Coors Non-Alcoholic, and Sharp's. Additionally, it sells various brands in the United Kingdom that include Carling, C2, Carling Chrome, Coors Light, Worthington's, White Shield, Red Shield, Caffrey's, Sharp's Doom Bar, Anime, and Blue Moon; and various regional ale brands, and factored brands, such as wines.
4. Beam, Inc. (BEAM, Earnings, Analysts, Financials): Produces and sells branded distilled spirits products worldwide. Market cap at $9.56B, most recent closing price at $60.37. Its principal products include bourbon whiskey, Scotch whisky, Canadian whisky, tequila, cognac, rum, cordials, and ready-to-drink pre-mixed cocktails under the Jim Beam, Maker's Mark, Sauza, Courvoisier, Canadian Club, Teacher's, Laphroaig, Knob Creek, Basil Hayden's, Kilbeggan, Cruzan, Hornitos, EFFEN, Pucker, Skinnygirl, Sourz Liqueurs, Pinnacle, and Calico Jack brands.
5. Brown-Forman Corporation (BF/B, Earnings, Analysts, Financials): Engages in manufacturing, bottling, importing, exporting, and marketing alcoholic beverages. Market cap at $13.1B, most recent closing price at $92.17. It offers products primarily under the brand names of Jack Daniel's, Gentleman Jack, Southern Comfort, Finlandia, Antiguo, Canadian Mist, Chambord, Don Eduardo, Early Times, el Jimador, Herradura, Korbel California, Maximus, New Mix, Old Forester, Little Black Dress, Collingwood, Pepe Lopez, Sonoma-Cutrer, Tuaca, and Woodford Reserve.
6. Central European Distribution Corp. (CEDC, Earnings, Analysts, Financials): Produces, imports, and distributes alcoholic beverages in Poland, Hungary, and the Russian Federation. Market cap at $222.5M, most recent closing price at $2.82. It produces and sells vodka primarily under the Absolwent, Zubrwka, Zubrwka Biala, Bols, Palace, Soplica, Green Mark, Parliament, Zhuravli, Royal, and Talka brand names. It also imports spirits, wines, and beers of various brands, including Jim Beam Bourbon, Campari, Jgermeister, Remy Martin Cognac, Corona, Budweiser (Budvar), E&J Gallo wines, Carlo Rossi wines, Sutter Home wines, Metaxa Brandy, Sierra Tequila, Teacher's Whisky, Cinzano, Old Smuggler, Grant's Whisky, Concha y Toro wines, Paul Masson wines, Jose Cuervo tequila, and Great Valley brandy.
7. Diageo plc (DEO, Earnings, Analysts, Financials): Engages in producing, distilling, brewing, bottling, packaging, distributing, developing, and marketing spirits, beer, and wine products. Market cap at $67.17B, most recent closing price at $107.22. It offers a range of brands, including Johnnie Walker scotch whiskies, Smirnoff vodka and Smirnoff ready to drink products, Baileys Original Irish Cream liqueur, Crown Royal Canadian whisky, Captain Morgan rum and rum based products, Jose Cuervo tequila, JeB scotch whisky, Buchanan's scotch whisky, Windsor Premier scotch whisky, Ketel One vodka, Ciroc vodka, Tanqueray gin, Bushmills Irish whiskey, and Guinness stout. The company also provides other spirits brands that comprise Gordon's gin and vodka, Old Parr scotch whisky, Bell's scotch whisky, The Classic Malts scotch whiskies, Seagram's 7 Crown whiskey and Seagram's VO whisky, Cacique rum, White Horse scotch whisky, Don Julio tequila, and Bundaberg rum. In addition, it offers beer under various brands, such as Malta Guinness non-alcoholic malt, Harp lager, Tusker lager, Smithwick's ale, Senator lager, and Red Stripe lager; and wine under a range of brands, including Blossom Hill, Sterling Vineyards, Beaulieu Vineyard, Navarro Correas, Acacia Vineyard, Rosenblum Cellars, Piat d'Or, Chalone Vineyard, and Santa Rita.
8. Constellation Brands Inc. (STZ, Earnings, Analysts, Financials): Produces and markets alcoholic beverages primarily in the United States, Canada, and New Zealand. Market cap at $5.31B, most recent closing price at $29.94. Produces, markets, and exports wine, as well as sells various wine brands across various categories, including table wine, sparkling wine, and dessert wine. It offers wine under the Robert Mondavi Brands, Clos du Bois, Blackstone, Estancia, Arbor Mist, Toasted Head, Simi, Black Box, Ravenswood, Rex Goliath, Kim Crawford, Franciscan Estate, Wild Horse, Ruffino, Nobilo, Mount Veeder, Inniskillin, and Jackson-Triggs brands; and spirits under the SVEDKA Vodka, Black Velvet Canadian Whisky, and Paul Masson Grande Amber Brandy brands. This segment also produces and markets wine kits and beverage alcohol refreshment drinks; and bulk wine and other related products and services. Constellation Brands, Inc.'s Crown Imports segment imports, markets, and sells beer primarily under the Modelo Brands that comprise Corona Extra, Corona Light, Coronita, Modelo Especial, Pacifico, Negra Modelo, and Victoria brands.
(Written by Rebecca Lipman)
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- Anheuser-Busch InBev (BUD, Chart, Download SEC Filings)
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- Beam, Inc. (BEAM, Chart, Download SEC Filings)
- Brown-Forman Corporation (BF/B, Chart, Download SEC Filings)
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- Diageo plc (DEO, Chart, Download SEC Filings)
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