The alcohol company Beam (BEAM) said that they would be buying Pinnacle vodka and Calico Jack rum brands for a total of $605 million to try to gain leverage in the growing vodka category. Beam, which includes Jim Beam and Maker’s Mark bourbons, said that their deal with White Rock Distilleries would not affect their existing brands’ production, according to CNBC.
Pinnacle is known for their variety of flavored vodkas, including dessert flavors like whipped cream and pineapple, and Beam says that they are expecting to sell over 3 million cases this year. They see opportunities to save 20% of the brands’ net sales.
Flavor-infused alcohols have gained tremendous popularity in the past few years with younger bar crowds, and have begun approaching in popularity or even overtaking beer in some scenes. Flavors such as mint, honey, Skittles, raspberry, and even bacon infused into different alcohols like vodka, rum, and whiskey spark the curiosity of bar and club patrons that are searching for an easier way of getting their buzz.
Kapitall reported last month that Coors (TAP) is launching an iced-tea flavored beer, which takes the ideas of the flavored liquor companies to make their drink stand out in flavor. Their hope is to take some of the mixed drink and Anheuser-Busch (BUD)’s market share.
Business Section: Investing Ideas
As popular, cheap, and easily attainable as beer is, the flavored alcohol category is gaining traction and popularity. Below is a list of alcoholic beverage companies that could be largely affected by the shift in trends. How do you think these companies will change and react?
Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:
2. Companhia de Bebidas Das Americas (AMBEV) (ABV, Earnings, Analysts, Financials): Engages in the production, distribution, and sale of beer, draft beer, carbonated soft drinks, malt, and other non-alcoholic and non-carbonated products in the Americas. Market cap at $137.76B, most recent closing price at $42.92.
3. 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 $116.89B, most recent closing price at $71.56.
4. 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 $63.76B, most recent closing price at $99.97.
8. CompaniaCerveceriasUnidas S.A. (CCU, Earnings, Analysts, Financials): Produces, bottles, sells, and distributes beverages in Chile and Argentina. Market cap at $4.63B, most recent closing price at $72.26.
9. Constellation Brands Inc. (STZ, Earnings, Analysts, Financials): Produces and markets alcoholic beverages primarily in the United States, Canada, and New Zealand. Market cap at $4.24B, most recent closing price at $21.05.
(Written by Danny Guttridge)
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Fomento Econ (FMX, Chart, Download SEC Filings)
- Companhia de Bebidas Das Americas (AMBEV) (ABV, Chart, Download SEC Filings)
- Anheuser-Busch InBev (BUD, Chart, Download SEC Filings)
- Diageo plc (DEO, Chart, Download SEC Filings)
- Brown-Forman Corporation (BF-B, Chart, Download SEC Filings)
- Beam, Inc. (BEAM, Chart, Download SEC Filings)
- Molson Coors Brewing Company (TAP, Chart, Download SEC Filings)
- CompaniaCerveceriasUnidas S.A. (CCU, Chart, Download SEC Filings)
- Constellation Brands Inc. (STZ, Chart, Download SEC Filings)
- Vina Concha y Toro S.A. (VCO, Chart, Download SEC Filings)
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