Mar 17, 2022 - Parker Timlin
Today is St Patrick's Day! To get into the spirit of Ireland's national day, we looked at some of the best companies that own and produce Irish-related beverages. With the overall market for alcoholic beverages growing, you might want to take a deep dive into some of these publicly traded companies and add a little Irish exposure to your stock portfolio.
The feast day of St. Patrick has evolved from a religious celebration to a day when we overindulge with green alcoholic beverages. This evolution transpired from the day of relief from Lenten fasting and the indulgence of partying and celebration, somewhere along the way we slapped green all over it and it stuck. This year the National Retail Federation expects total spending in the US to be $5.87B with 54% of respondents saying they were celebrating. In honour of Ireland's patron saint, Utradea has identified some great alcohol companies to celebrate St. Patrick's Day with and a few fun recipes you can support your investments with!
* Just as a reminder do not drink and trade
These alcohol stocks are part of a category known as "sin stocks,” which includes marijuana equities as well as tobacco, gambling, and weapons companies. This means they can be volatile even in healthier economic climates and do not always succeed in recessions. However, many liquor and alcoholic beverage corporations have well-known brands and significant pricing power with global distribution network and more cash flow, so they can pay a larger dividend to owners and are considered consumer staples.
The growing Alcoholic Beverages Market is reporting a 9.1% growth rate, by 2028, it is estimated to be worth $2,797.05 billion according to to Polaris Market Research. On average Globally people consume 6.2 litres of pure alcohol every year (equates to 53 bottles of wine) and in 2020, Americans consumed the most amount of alcohol since 1990.
With the continued growth in the global alcoholic beverage market, we look at 4 stocks that service this industry and provide some of the leading Irish dink names
Diageo is a global leader in beverage alcohol, with an impressive portfolio of spirits and beer brands including Guinness, Smithwick's, Baileys, Harp Lager, and Kilkenny all of which originated in Ireland. Even though it is not an Irish stock, any corporation that owns the Guinness brand has a strong Irish link. The company boasts many other brands providing something for everyone. It caters to both the high and low ends of the alcohol market, with enough variety to appeal to any type of consumer. In 2021 Diageo saw significant organic net sales growth of 20% across all areas and expects organic net sales to rise at a rate of 5% to 7% annually, with organic operating profit growing at a rate of 6% to 9%. In addition, the company has ambitions to increase manufacturing capacity, improve digital capabilities, invest in new talent, and continue with their ambitious 10-year sustainability strategy.
In the mood for some Guinness? Try a Guinness Bloody Mary
Heineken N.V. is a multinational brewing corporation based in Amsterdam, founded in 1864 by Gerard Adriaan Heineken. Heineken owns over 300 brands and sells to over 190 countries worldwide making them the No. 2 brewer in the world. It produces 348 beers and ciders from around the world, as well as regional, local, and specialty beers and ciders. Heineken's Irish ties are through their ownership of Murphy's an internationally recognized Irish stout, Bulmers Ireland's most famous cider, and Beamish Irish Stout. In 2021 the company reported organic growth of 80.2% for net profit (beia), 12.2% for net revenue, and 43.8% for their operating profit (beia).
In the mood for some Jameson Whiskey? Try a Classic Whiskey Sour
Brown-Forman is most famous for its trademark Jack Daniels whiskey, which alone gives this stock a lot of authority. They also happen to own Slane Irish Whiskey tying them in perfectly to this list. Brown-Forman has been enriching people's lives for more than 150 years by sustainably creating excellent quality beverage alcohol brands that are distributed in more than 170 countries across the world. 2021 was the 37th year in a row, the Board of Directors increased the regular dividend and announced a regular dividend for the 77th year in a row. The company also reported a net sales increase of 3% in 2021 and an increase of 7% in their operating income.
In the mood for some Slane Irish Whiskey? Try a Slane & Soda
Corby represents the Irish brand Jameson Whiskey; they are a leading Canadian marketer and distributor of premium spirits and imported wine brands. The company offers a diverse selection of brands that drive profitable organic growth. Corby reported an increase of 4% in revenue and a 15% increase in net earnings. Additionally, Pernod Ricard's the world's second-largest wine and spirits seller is the parent company and has signed a five-year agreement to distribute their international brands with Corby. This will help Corby to expand their market presence and sustain their growth.
In the mood for some Jameson Whiskey? Try making The Rude Boy
Hopefully, this has sparked your imagination and provided you with some direction to continue learning about these companies. From a macro perspective, they might provide a decent perspective, especially with the growing beverage industry.
Enjoy a beverage or two today, and remember to make sure to do your research. Do not drink & trade, and have a great St Patrick's Day!