October 16, 2020
Liqueurs, sweetened and flavored liquors with ABVs that range anywhere from 15 to 55 percent, show up in a wide range of cocktails alongside liquor and sometimes beer. Your Blue Hawaiian wouldn't be the same without blue Curacao, nor would your Nutty Irishman be nutty at all without spirits like Bailey's and Frangelico. Thanks to these publicly traded companies, it's also possible for investors to stock their portfolios with the same brands they keep in their liquor cabinets.
In honor of National Liqueur Day, here are a few, along with some alternatives for those who prefer to imbibe other forms of adult beverages:
Brown-Forman Corporation (Tii:BFB)
Chambord raspberry liqueur makes its way into a wide range of cocktails, including the Raspberry Margarita, French Manhattan, French Martini, and many more. Aside from this versatile liqueur, parent company Brown-Forman keeps its portfolio diversified with top brands that range from Jack Daniels and Old Forester to Finlandia vodka. The 150-year-old company has had some challenges due to the pandemic, with non-branded and bulk underlying net sales declining 29% in their most recent 2020 fiscal year. However, they saw net sales in the U.S. increase by 5%, with a total of $3.36 billion in sales.
Diageo plc (TII:DEO)
The makers of Bailey's Irish Cream – one of the world’s most popular liqueurs – literally created the market. This well-imbibed liqueur was introduced in 1974 as the first Irish cream ever created. Diageo is also the world's largest distillery, earning $16.8 billion in 2019. An operating margin of 31.3% supports a healthy 2.42% dividend yield. Other popular spirit brands owned by Diageo include Captain Morgan, Smirnoff, Crown Royal and Johnnie Walker.
Rémy Cointreau SA (Tii:REMYY)
In addition to its popular Rémy Martin and Louis XIII cognacs, this French distiller is the company behind the liqueur Cointreau, the Greek spirit Metaxa, Mount Gay Rum, the French brandy St-Rémy, the single malts Bruichladdich, Port Charlotte and Octomore, the American single malt Westland, the French organic single malt Domaine des Hautes Glaces, and The Botanist gin. Keeping pace with the consolidation in the industry, in January 2017, Rémy Cointreau announced two acquisitions: Westland Distillery, an American single malt whisky distillery based in Seattle, and Domaine des Hautes Glaces, an organic single malt whisky distillery in the French Alps.
Constellation Brands, Inc. (Tii:STZ)
In addition to its Paul Masson line of brandy, this beverage company has over 100 brands in its portfolio across sectors that include wine, beer and spirits. Constellation has even expanded into the cannabis market recently with the purchase of a 38.6% stake in Canopy Growth. The diversification has been good for them, with revenue that grew by 21% between 2016 and 2019. However, like many brands, they have seen the effects of COVID on their sales; revenues for the quarter ending August 31, 2020, totaled $2.26 billion, a 3.57% decline from the same quarter last year.
The Boston Beer Co., Inc. (Tii:SAM)
More of a beer fan? Boston Beer is one of the pioneers of the craft beer craze and also has its hands in areas that include hard cider and increasingly trendy hard seltzer. The company reported net revenue of $452.1 million in the second quarter of 2020, an increase of 42% over the same period last year. However, the company was cautious in its most recent earnings report. COVID has increased costs for the company, between expenses related to safety and sanitation and also a need to use third-party brewers to fill the demand for product. It takes a mix of flavors to make a great cocktail, just as it takes a mix of stocks for a diversified portfolio. Look to your favorites to see which you think are the best picks for you.