Tahoe-Truckee Market Beat: Craft beer, whiskey among millennial women on the rise
December 24, 2015
TRUCKEE, Calif. — The S&P 500 index is broken down into different sectors. Each sector is composed of various industries. The Consumer Staples or Consumer Defensive sector consists of 13 industries that include the three beverage industries;: brewers, soft drinks, and wineries & distilleries.
The Consumer Staples sector is also known as Consumer Defensive because people usually continue to consume products like food, soap and beverages even in economic downturns. Spending in the beverage industry also tends to be pretty good around the holidays.
There are some interesting trends going on in the beverage industry. I recently spoke with Devon Bergman, the CEO of a company called Bartrendr. Bartrendr has an app called Open Bar that has almost 1 million users and tracks trends in the industry. Open Bar tracks over 100,000 beverage products, and the data is sold to the major beverage companies for analytical purposes.
One trend that has been around for a long time is the popularity of craft beers. While the major beer companies like Budweiser and Coors still have a dominant market share, craft brews are increasingly popular.
Budweiser is owned by AB InBev and the stock symbol is "BUD." BUD has a market cap of almost $200 billion making it the largest player in the industry. Molson Coors has a market cap of about $17 billion and its symbol is "TAP."
Other leading beer stocks include Heineken, symbol, "HEINY" with a $48 billion market cap, and Boston Beer, symbol, "SAM" with a $2.65 billion market cap. One small cap stock in the craft beer segment is known as Craft Brew Alliance, its symbol is "BREW" and it is a $165 million company.
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Another interesting trend is that whiskey is becoming very popular with the millennial generation, especially among female consumers. That trend is relatively new and it will be interesting to see how it plays out. Women from the boomer generation have a tendency to drink more white liquors like vodka and gin.
Leading stocks in the liquor industry include companies like Diageo and Constellation Brands. Diageo's product line includes Crown Royal, Bailey's, Ketel One, Smirnoff and Tanqueray.
Their symbol is "DEO" and they are a $67 billion company. Constellation Brands has a $27 billion market, trades under the symbol, "STZ", and one of their leading brands is Black Velvet.
Hope you enjoy the holiday season with friends, family and one of your favorite beverages.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.