In this article, we’ll take a closer look at the top beer, liquor, and alcohol stocks in Canada, highlighting their performance, growth potential, and other key factors you should consider before investing.
Why are Alcohol Stocks a Good Investment?
Investing in alcohol stocks in Canada can be a good idea for a few reasons:
- Resilient demand: Alcohol is considered a recession-resistant product as the demand for alcoholic beverages remains relatively stable even during economic downturns. This makes alcohol stocks an attractive option for investors seeking a stable and predictable source of income.
- Industry consolidation: The alcohol industry is highly consolidated, with a few prominent players dominating the market. This consolidation has created a barrier to entry for new players and has allowed established companies to maintain their market share and pricing power.
- Premiumization trend: Consumers are increasingly willing to pay a premium for high-quality and unique alcoholic beverages. This trend has created opportunities for companies to offer premium and super-premium products, which can help drive revenue growth and improve profit margins.
- Innovation: The alcohol industry constantly evolves, with companies developing new products and flavours to cater to changing consumer preferences. Companies that innovate and introduce new products can gain a competitive advantage and capture market share.
- Regulatory environment: The alcohol industry is subject to various regulations and restrictions, which can limit competition and provide stability for established companies.
You might think that alcohol is discretionary and cyclical. Still, because of its nature (a sin stock), its demand is consistent and even improves during downturns, making it a consumer staple indeed.
The Best Canadian Beer & Alcohol Stocks
Here are 10 Canadian company stocks that could give exposure to the beer and spirits industry, along with a brief explanation of why each could be a good investment:
Molson Coors Beverage Company (TPX.B.TO)
Molson Coors is one of the largest beer producers in the world and has a strong presence in Canada. They own popular brands such as Molson Canadian, Coors Light, and Blue Moon. Molson Coors has a history of stable dividend payments and a solid balance sheet.
Rocky Mountain Liquor Inc. (RUM.V)
Rocky Mountain Liquor Inc. (RUM.V) is a Canadian company that operates liquor stores in Alberta, Canada. The company was founded in 2008 and has since expanded to over 30 locations in the province.
Rocky Mountain Liquor stores offer a wide selection of beer, wine, spirits, and other alcoholic beverages, as well as tobacco and lottery products. The company aims to provide customers with a convenient and enjoyable shopping experience while offering competitive product pricing.
Constellation Brands Inc. (NYSE:STZ-N)
Constellation Brands is a leading producer and marketer of beer, wine, and spirits. They own popular brands such as Corona, Modelo, and Kim Crawford. The company has a strong balance sheet and has invested in new products and distribution channels.
Labatt Brewing Company Limited (Anheuser-Busch NYSE:BUD)
Labatt Brewing is one of the largest brewers in Canada and is a subsidiary of Anheuser-Busch InBev. They own popular brands such as Budweiser, Stella Artois, and Labatt Blue. The company has a long history in the Canadian market and is well-positioned to benefit from continued growth in the beer industry.
Diageo PLC (NYSE:DEO)
Diageo is a global leader in producing and distributing spirits, beer, and wine. They own popular brands such as Johnnie Walker, Smirnoff, and Guinness. The company has a strong balance sheet and has been investing in expanding its presence in emerging markets.
Andrew Peller Ltd. (ADW.A.TO)
Andrew Peller is a Canadian wine producer that owns popular brands such as Peller Estates, Trius, and Thirty Bench. The company has a strong track record of growth and has been expanding its production capacity to meet increasing demand.
Corby Spirit and Wine Ltd. (CSW.A.TO)
Corby Spirit and Wine is a leading Canadian producer and marketer of spirits and wine. They own popular brands such as J.P. Wiser’s, Polar Ice, and Ungava. The company has a strong balance sheet and has been investing in expanding its product portfolio and distribution channels.
Big Rock Brewery Inc. (BR.TO)
Big Rock Brewery is a Canadian craft beer producer that owns popular brands such as Traditional Ale and Grasshopper. The company has a strong focus on quality and has been expanding its product portfolio to meet the changing preferences of consumers. The company has a solid balance sheet and has been investing in developing its distribution channels.
Ambev SA is the successor to Companhia Cervejaria Brahma and Companhia Antarctica Paulista Industria Brasileira de Bebidas, two of Brazil’s oldest breweries. Ambev is a producer and distributor of alcoholic beverages today. Beer is the company’s principal business.
Soft drinks and other non-alcoholic beverages are also a part of the company’s smaller operations. Ambev currently operates in 16 countries, most of which are in South America, Central America, and Latin America.
The company has made a significant recovery since the coronavirus outbreak.
Ambev’s direct–to–consumer distribution is also expanding, with Ze Delivery in Brazil, Appbar in LAS, and Colmapp in CAC. Ambev pays a dividend yield of more than 2%. Because the dividend is issued in Brazilian currency, the amount paid in US dollars will fluctuate depending on exchange rates. As a result, shareholders should not expect Ambev to be a reliable source of dividends.
Kirin is Japan’s second-biggest beer company, trailing only Asahi Group Holdings (OTC: ASBRF) and one of the country’s largest consumer staples corporations. On the other hand, Kirin isn’t a fast-growing company, and sales have been flat for years. On the other hand, profitability is improving after the COVID-19 outbreak, which helps to support this top dividend-paying beer investment.
Kirin also has a health science division, leveraging its beverage manufacturing capabilities to develop a healthy food and beverage company. With people worldwide becoming more concerned about their health and well-being and focusing on a more nutritious diet, Kirin may find that applied health science in food and drink is a viable sector. This modest section won’t restart growth for Japan’s No. 2 beer maker overnight, but it does provide Kirin with a new region to sow future expansion seeds. Kirin is also working on digital changes to enhance its operations.
Boston Beer Company
Boston Beer has long been a strong supporter of the independent craft beer movement; Boston Beer was founded in 1984 by James Koch in Boston, Massachusetts. Boston Beer’s specialties include craft beer, hard cider, and hard seltzer. Samuel Adams, Twisted Tea, Angry Orchard, and Truly Hard Seltzer are the company’s top alcoholic beverage brands.
Boston Beer still represents a slice of North American beer consumption, even if it isn’t the little business it once was.
The pandemic resulted in a significant increase in alcohol usage at home. As a result, Boston Beer’s sales grew faster this year than they did the previous year. Consumer trends are constantly shifting, which has resulted in certain inconveniences, such as lower-than-expected demand for spiked seltzer drinks this summer and autumn. However, double-digit percentage sales growth is wonderful in an industry dominated by slow and predictable consumer trends.
Boston Beer also has no debt, which is unusual among the world’s largest breweries.
Craft Brew Alliance (NASDAQ: BREW)
Craft Brew Alliance is a beer and cider company situated in Portland, Oregon. Kona, Redhook, Cisco, pH Experiment, Widmer Brothers, Wynwood Brewing, Omission, Square Mile Cider, and the Appalachian Mountain Brewery are some of the company’s brands.
Anheuser-Busch InBev plans to purchase this alcoholic beverage company in 2021 entirely. These alcoholic beverage brands will be merged with Anheuser-craft Busch’s subsidiary, the Brewers Collective, including Goose Island, Elysian, and Wicked Weed.
Willamette Valley Vineyard (NASDAQ: WVVI)
Pinot noir, Dijon clone Chardonnay, Pinot Gris, and Riesling grapes are grown and made in Oregon at Jim Bernau’s Willamette Valley Vineyards.
Bernau and his company were among the first to make wine in Oregon. In addition, the winery is notable for being the first in the United States to be crowdfunded.
Brown-Forman (NYSE: BF.A)
Brown-Forman is a global spirits and wine firm with over 170 locations. It focuses on whiskey, vodka, and tequila and has a vast product portfolio.
Jack Daniels (the flagship brand), Herradura, Woodford Reserve, El Jimador, and Finlandia are some of the company’s most well-known products.
Brown-Forman has a remarkable 30-year dividend increase track record thanks to its substantial brand value, making it a proven recession-resistant stock.
Compared to slower-growing competitors such as Compania Cervecerias Unidas (CCU), earnings growth should be at least 7% over the next five years.
How to Invest in Beer Stocks:
Here are some steps to consider when looking to invest in beer stocks:
- First, research the beer industry: Before investing in any beer stocks, it’s essential to understand the industry and the trends driving it. Look at the industry’s major players, products, sales, and growth prospects.
- Choose a beer company to invest in: Once you’ve researched the industry, you must choose one. First, look for a company with a strong brand and a history of growth and profitability. Next, consider the company’s financials, including its revenue, earnings, and debt levels.
- Open a brokerage account: To invest in beer stocks, you must open a brokerage account with a reputable online broker. You’ll be able to buy and sell stocks through your brokerage account.
- Decide how much to invest: Determine your willingness to invest in beer stocks. Remember that investing in stocks carries risks; you should never invest more than you’re comfortable losing.
- Place your order: Once you’ve chosen a beer company to invest in and opened a brokerage account, you can place your order to buy the stock. You can place a market order, which will execute the trade at the current market price, or a limit order, completing the transaction at a specific price you set.
- Monitor your investment: After you’ve invested in a beer company, be sure to monitor your investment regularly. Keep current with the company’s financial performance and industry trends, and be prepared to adjust your investment strategy if necessary.
What’s the largest alcohol company in Canada?
The largest alcohol company in Canada is Constellation Brands Canada, a subsidiary of Constellation Brands Inc., a global producer and marketer of beer, wine, and spirits.
Constellation Brands Canada is headquartered in Mississauga, Ontario and has a diverse portfolio of iconic brands, including Corona, Robert Mondavi, Kim Crawford, and Jackson-Triggs.
In addition to its wine and spirits brands, the company owns Canadian rights to Corona and Modelo beer brands. Constellation Brands Canada is a significant player in the Canadian alcohol market and is a subsidiary of one of the largest alcohol companies in the world.
Will You Invest in Canadian Liquor Stocks?
Investing in beer and alcohol stocks in Canada can be a good option for investors seeking a stable source of income. This is because the alcohol industry in Canada is highly consolidated, with a few prominent players dominating the market.
This creates a barrier to entry for new players and allows established companies to maintain their market share and pricing power. Additionally, the demand for alcoholic beverages remains relatively stable, making them a recession-resistant product.
However, investors should research and consider their risk tolerance before investing in any stocks, including those in the beer and alcohol industry.
It’s essential to stay up to date with industry trends and the financial performance of individual companies to make informed investment decisions.