Beverage Stocks: Introducing Coors' Iced-Tea Beer
Coors plans to launch an iced-tea beer next month, just in time for summer. MarketWatch reports the beer industry is taking hints from the liquor industry, which has successfully marketed exotic mixed drink flavors. The beer industry, meanwhile, has seen its sales volumes decline for three consecutive years.
"Liquor companies are advertising more, but what they're advertising is more and more flavors and interesting concoctions that create some buzz," explains Wall Street Journal reporter Mike Esterl.
Furthermore, craft beer brewers, which typically sell unique flavors, have been swiping market share from big brands like Budweiser, Miller, and Coors. As the saying goes: If you can't beat 'em, join 'em.
Big companies are responding by rolling out some mixed flavors of their own. Coors' Light Iced T beer will be debuted in Canada and, if successful, find itself on shelves in the U.S. It will have a 4% alcohol content, but no caffeine.
The Wall Street Journal reports, "Anheuser-Busch, which boasts nearly a 50% market share in the U.S. beer market, is launching Michelob Ultra 19th Hole Light Tea and Lemonade in April for American drinkers. Its two biggest brands, Budweiser and Bud Light, have seen U.S. volumes slump in recent years."
MillerCoors, which claims 25% of the U.S. beer market largely thanks to its Coors and Miller brands, is tackling the cider market, "which is small but growing."
Beer makes up half the U.S. market share for alcoholic beverages. Hard liquor represents about a third of market share, and wine makes up most of the remaining market.
Business section: Investing ideas
Do you think this new direction toward exotic flavor and variety will pan out for beer companies? Will it help them win back their market share from the hard liquor and wine industries?
If you're looking for exposure to this trend, here are some of the largest beer companies trading on the U.S. exchanges. (Click here to access free, interactive tools to analyze these ideas.)
1. Companhia de Bebidas Das Americas: 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 of $124.59B. The stock has gained 49.83% over the last year.
2. Anheuser-Busch InBev (NYS: BUD) : Engages in brewing and selling beer in North America, Latin America, Europe, and the Asia Pacific. Market cap of $107.40B. The stock has gained 18.92% over the last year.
3. Compania Cervecerias Unidas (NYS: CCU) : Produces, bottles, sells, and distributes beverages in Chile and Argentina. Market cap of $4.44B. Relatively low correlation to the market (beta = 0.65), which may be appealing to risk averse investors. The stock has gained 30.87% over the last year.
4. Fomento Econ: Engages in non-alcoholic beverage, retail, and beer industries. Market cap of $130.68B. The stock has gained 30.24% over the last year.
5. Craft Brew Alliance (NAS: HOOK) : Engages in the production and marketing of beers under the Widmer Brothers, Redhook, and Kona Brewing brand names in the United States. Market cap of $115.87M. The stock is a short squeeze candidate, with a short float at 5.11% (equivalent to 12.11 days of average volume). The stock has lost 29.95% over the last year.
6. Boston Beer (NYS: SAM) : Produces and sells alcohol beverages primarily in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico. Market cap of $1.26B. The stock is a short squeeze candidate, with a short float at 23.47% (equivalent to 16.49 days of average volume). The stock has gained 4.38% over the last year.
7. Molson Coors Brewing (NYS: TAP) : Distributes beer brands. Market cap of $7.60B. Relatively low correlation to the market (beta = 0.73), which may be appealing to risk averse investors. Offers a good dividend, and appears to have good liquidity to back it up -- dividend yield at 3.04%, current ratio at 1.66, and quick ratio at 1.5. The stock has lost 2.46% over the last year.
8. Vina Concha y Toro: Produces and markets wine products. Market cap of $1.68B. Relatively low correlation to the market (beta = 0.65), which may be appealing to risk averse investors. The stock has gained 1.77% over the last year.
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 Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.
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