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4 Stocks to Watch as Alcohol Sales Hit Multi-Year Highs

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The pandemic left the restaurant industry bleeding, with sales picking up very recently. However, alcohol sales saw record growth during the pandemic and the trend is continuing into this year. A lot of the credit goes to e-commerce for this.

Higher sales at stores and e-commerce have been keeping spirits high for the liquor companies. According to the International Wines and Spirits Record’s (IWSR) Drinks Market Analysis, 2020 was one of the best years for the spirit industry and the momentum is likely to continue this year too.

Alcohol Sales Hit Record High

According to the IWSR’s Drinks Market Analysis, alcohol sales rose 2% in the United States in 2020, its biggest year-over-year jump since 2002. The spirits category witnessed the biggest jump last year.

The reason is simple. Given that bars and restaurants were closed during the pandemic, people couldn’t buy cocktails and mocktails. Hence they mainly stocked up on spirits during this time. Spirit sales grew 4.6% year over year in 2020. This is the   biggest single-year jump since 1990. 

Also, agave-based spirit sales soared 15.9% year over year in 2020. Vodka and whisky were the best-selling spirits category. As more people stayed home last year, they stocked up on spirits much like essential goods. Moreover, severalsellers strengthened their online wing during the pandemic, leading to easy supply and delivery of alcohol to customers.

E-Commerce Driving Alcohol Sales

A separate ISWR report shows that online alcohol sales jumped a whopping 42% globally to $24 billion in 2020, with the United States driving the bulk of the business. Online alcohol sales soared 80% in the United States to $5.5 billion in 2020.

Moreover, the launch of a number of new e-commerce sites last year particularly aimed at selling spirits further facilitated sales. Interestingly, prior to the pandemic or in 2019, only 1% of the total alcohol sales came from e-commerce.

Needless to say, despite restaurants and bars being closed for weeks in 2020 and then having limited occupancy, alcohol sales were not hampered. In fact, according to ISWR, alcohol sales have been surging in 2021 also and the trend is likely to continue. ISWR expects alcohol sales to grow 3.8% year over year in 2021 as sales have been on the rise, with e-commerce playing an important role.

Stocks to Watch

Given that the pandemic has taught people to rely more on shopping online, it is likely that the alcohol market will continue to thrive. Moreover, the pandemic is not over and people will continue drinking at home thus helping alcohol sales. It would thus be prudent to keep a close tab on these five alcohol stocks.

The Boston Beer Company, Inc. SAM is one of the largest craft brewers in the United States. Boston Beer produces beer, malt beverages and cider products at company-owned breweries and under contract. 

The company’s expected earnings growth rate for the current year is 66.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. The Boston Beer Company carries a Zacks Rank #2 (Buy).

Diageo plc DEO operates in approximately 180 countries and is involved in producing, distilling, brewing, bottling, packaging as well as distributing spirits, wine and beer. 

The company’s expected earnings growth rate for the current year is 18.4%. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the past 60 days. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Molson Coors Beverage Company TAP is a global manufacturer and seller of beer and other beverage products. It has an impressive portfolio of owned and partner brands.

The company’s expected earnings growth rate for next year is 6.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. The company has a Zacks Rank #3.

AnheuserBusch InBev SANV BUD is a global brewing company with more than 500 iconic brands. The company’s leading position in the majority of its markets and a strong global footprint lends itthe advantage of economies of scale and growing multi-country brands. 

The company’s expected earnings growth rate for the current year is 63.4%. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 30 days. AnheuserBusch InBev SANV has a Zacks Rank #3.

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Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
 
Diageo plc (DEO) : Free Stock Analysis Report
 
AnheuserBusch InBev SANV (BUD) : Free Stock Analysis Report
 
The Boston Beer Company, Inc. (SAM) : Free Stock Analysis Report
 
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