Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Wine Production Stocks: Liquors Continues to Take Market Share from Beer

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

As the millennial generation enters an age where they can drink legally (or nearly so), beer is increasingly losing market share to a proliferation of alternative liquors and wine.

Producers of hard alcohol can simply expand their production lines, and have been doing so, to meet increasing demand. Doing the same is not as easy for wine producers because of a reliance on the growth of grapes, and a lack of supply could easily put upward pressure on retail prices.

Current supply/demand issues
In the late 1990s in Northern California, a region responsible for 90% of domestic wine production, vineyards experienced a significant increase in the growth of grapes. The glut of supply and the resulting decrease in prices caused many producers to roll back their grape growth and focus on different crops.

However, as more consumers turn to wine as their alcohol of choice over the past decade, Vineyards in California have failed to adjust to this shift in consumer behavior. Between the unexpected demand and the roughly three-year period that it takes for grapes to be planted before coming to maturity, either an increase in retail price or imports of wine seems imminent.

Business section: Investing ideas
Below we have compiled a list of alcohol producers whose share value is likely to be affected by these events. Do you think foreign producers stand to benefit, or will American's turn to other cheaper and more accessible forms of alcohol to imbibe? (Click here to access free, interactive tools to analyze these ideas.)

1. Beam (Nasdaq: BEAM  ) : Market cap at $9.65B, most recent closing price at $61.25.

2. Brown-Forman (Nasdaq: BF-B  ) : Market cap at $12.6B, most recent closing price at $89.20.

3. Central European Distribution (Nasdaq: CEDC  ) : Produces, imports, and distributes alcoholic beverages in Poland, Hungary, and the Russian Federation. Market cap at $227.85M, most recent closing price at $2.89.

4. Diageo (NYSE: DEO  ) : Engages in producing, distilling, brewing, bottling, packaging, distributing, developing, and marketing spirits, beer, and wine products. Market cap at $61.76B, most recent closing price at $98.61.

5. Constellation Brands (NYSE: STZ  ) : Produces and markets alcoholic beverages primarily in the United States, Canada, and New Zealand. Market cap at $3.62B, most recent closing price at $19.15.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.

Kapitall's Dan Connelly does not own any of the shares mentioned above.

Motley Fool newsletter services have recommended buying shares of Diageo and Beam. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1910435, ~/Articles/ArticleHandler.aspx, 10/24/2016 4:31:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
CEDCQ.DL $0.00 Down +0.00 +0.00%
Central European D… CAPS Rating: **
DEO $108.21 Down -0.03 -0.03%
Diageo CAPS Rating: *****
STZ $169.57 Up +2.16 +1.29%
Constellation Bran… CAPS Rating: ****