U.S. alcohol sales rose 55% during the first week of extended coronavirus lockdowns, with wine sales up 42% on a year-over-year basis, per Benzinga. Those demand numbers have pushed beverage producers into investor focus. Consumer staples, the sector where wine and alcohol producers sit, tends to outperform during recessions because food and alcohol demand stays relatively flat regardless of economic conditions.
Five tickers, one sector
Diageo (NYSE: DEO), Brown-Forman Class A (NYSE: BF/A), Pernod Ricard S.A. ADR (OTC: PRNDY), Willamette Valley Vineyards (NASDAQ: WVVI), and Constellation Brands (NYSE: STZ) are the publicly traded names on Benzinga's wine stock list. At listed prices, DEO traded at $88.06, STZ at $130.24, BF/A at $29.22, and PRNDY at $15.59, off 0.57%. WVVI was the outlier, up 12.2% to $2.85. Of the five, DEO and STZ carry listed dividends; BF/A, PRNDY, and WVVI show none. Benzinga notes that several names in the group trade with thin float, which can limit share availability at certain brokers and warrants checking before opening a position.
Margins and brand equity over revenue
Consumer staples face inelastic demand, meaning sales volumes do not swing meaningfully from quarter to quarter. Gross margin, calculated by subtracting cost of goods from net sales, is the ratio worth tracking rather than top-line revenue growth. Brand strength is the second key variable. Benzinga notes that consumers seek specific labels rather than generic categories, citing Jack Daniels and Johnny Walker as illustrations of how brand loyalty supports pricing power. Alcohol producers are not significant research and development spenders. They return cash through dividends and buybacks. The Invesco BuyBack Achievers ETF (NYSE: PKW) is one vehicle Benzinga references in the shareholder return context.
Vint: securitized wine exposure
For investors who want direct commodity exposure outside equities, Benzinga profiles Vint, a platform founded in 2019. Vint securitizes fine wines and rare spirits as SEC- and FINRA-regulated offerings, with a $100 minimum per collection and a 20% cap on single-offering exposure. There is no secondary marketplace. Holding periods run 1 to 7 years. The platform accepts capital via Self-Directed IRA, trusts, and other entities, with proceeds distributed pro-rata from partial or complete sales.
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