WHILE AMERICANS ARE GETTING SOBER THEIR STOCKS ARE FEELING THE HANGOVER

Americans Are Sober(er)—And Alcohol Giants Are Feeling the Heat

The Big Shift

• Just 54% of U.S. adults report drinking alcohol, hitting a record low—compared to 62% in 2023.

• The healthy-sober movement is especially strong among Gen Z, where nearly two-thirds now view alcohol as harmful.

• Portland is leading the charge, becoming a hub for sober living and mocktail culture.

Why? Here’s What’s Driving the Drop

• Health Concerns: The Surgeon General and medical groups have spotlighted alcohol’s links to cancer, changing how young people see even moderate drinking.

• Financial Pressures: Inflation, student debt, and cost-conscious younger adults are cutting back on booze—bar tabs don’t fit tight budgets.

• Culture Shift: Mocktails, zero-proof venues, and wellness culture are replacing the once-alcohol-dominant social scene.

What’s the Industry Doing?

• Innovating with Alternatives: Major players like Diageo, Molson Coors, and Anheuser-Busch are pivoting into premium, transparent, and ready-to-drink (RTD) options geared toward younger tastes.

• Rebranding for Authenticity: A new wave of additive-free spirits and mocktail brands (like Talkhouse Encore) are booming, winning not just health-driven customers—but ones seeking realness.

• Rooted in Tradition, But Adapting: In places like Kentucky, legendary whiskey fortunes are crumbling—distilleries are drowning under debt, poor exports (due to tariffs), and that Gen Z pivot.

Why Booze Stocks Have Been Getting Dunked 🥴

1. Gen Z just doesn’t pour like before

   
   

   Young folks are ditching booze in favor of health, wellness, mocktails, and even cannabis. Alcohol consumption hit historic lows.

   
   

2. GLP-1 drugs are curbing cravings

   
   

   Weight-loss meds weirdly dampen alcohol sales—less appetite, less buzz.

   
   

3. Tariffs + macro costs

   
   

   Beer and spirits makers feel the squeeze from aluminum and steel tariffs, higher production costs, and shifting demand.

   
   

Big Money: Buffett Chooses Booze? 🍻

• **Buffett just more than doubled his stake in Constellation Brands (STZ), marker of Corona/Modelo beer. Now owns ~6.6%, ~$2.2B value.

• That’s his move away from banks into “fun”—yes, fun!

  
  

Top Alcohol Stocks Lined Up: Pros, Cons & What’s Next

Let’s rank them from most intriguing for your watchlist to proceed with caution, with key fundamentals & vibes:

Constellation Brands (STZ) – Buffett’s Favorite

Highlights: EPS ~$3.22; wine/spirits slumped ~28%, beer down ~2% YoY.

Bull Case: Strong beer portfolio, solid FCF, undervalued (P/E ~12.8×), decent 2.3% dividend yield.

Risks: Tariffs, wine/spirits hit, consumer pullback, earnings volatility post-reports.

Anheuser-Busch InBev (BUD) – Big Investor Doubts

Q2: EPS 98¢ beat est. 96¢, revenue slightly miss, volumes down ~2.2%.

Stock: -9% on the nose.

Bull Case: Global scale, premium brands, analyst giving 20% upside.

Risks: Shrinking demand, especially China/Brazil setbacks.

Molson Coors (TAP) – Tariff-strained but Buying Back

Q2: EPS $2.05 beat, sales down 1.6%, volumes down 7%. Guidance cut for year.

Good sign: $307M share repurchase.

Bull Case: Confident leadership, cyclical dip, value pricing.

Risks: Weak volumes, macro drag, tariffs.

Brown-Forman (BF.B) – Whiskey Woes

Q4: EPS 31¢ vs 56¢ year-ago; revenue -7.3%. Stock down 18% in a day.

Reasons: GLP-1 impact, cannabis, generational shift.

Bull Case: Premium spirits, international growth in South Korea/Brazil.

Risks: Continued demand drop, margin pressure, macro uncertainty.

Diageo (Johnnie Walker, etc.) & Brown-Forman have both seen 50–67% stock drops since 2022. Struggling across the entire spirits segment.

Quick Fundamentals Snapshot (approx): STZ vs BUD vs TAP vs BF.B

• STZ: Forward P/E ~12.8×, dividend ~2.3%, low debt vs FCF.

• BUD: P/E ~15–18×, global presence, high leverage.

• TAP: P/E ~11×, safe dividend ~2.7%.

• BF.B: P/E ~16×, solid balance sheet, premium portfolio.

TL;DR Verdict – Worth the Sippy Cup?

• Why buy now?

  
  

  • Most stocks are trading near multi-year lows.

  • Buffett’s move into STZ gives it a legit “smart money” signal.

  • If you’re in for long-term value, these dips could pay off.

  • Non-alcoholic pivots + emerging markets growth adding optionality.

    
    

• Why be cautious?

  
  

  • Alcohol consumption is fundamentally shifting—health trends are here to stay.

  • Tariffs + GLP-1 trends = structural, not just cyclical headwinds.

  • Volatility is real—earnings reports trigger big moves post-earnings.

    
    

Final Pour: Smart Squad

1. STZ – Top pick for value + Buffett approval.

2. BUD – Global scale; downside if Latin markets recover.

3. TAP – Cheap, dividends, but cyclical.

4. BF.B – Premium premium, but heavily weighed by demand drops.