A top down analysis is not sufficient. Large listed companies are global, not U.S. only.
liquor is a very region business. a brand's strength various across different regions. Also, different regions have different demographics and culture both drive demand. lastly, distribution is super important as well. Johnnie Walker is more a mid class drink while luxury in Latin America. Cognac XO sales are stronger in Asia than in the U.S..
besides, Canadian whiskey and tequila are made inside of the countries not just the raw material.
Thanks for your insights Ethan! This is a high-level analysis where we explore the industry and its peers broadly. We recognize that liquor is highly regional, with brand strength, demographics, culture, and distribution varying across markets.
A more granular, bottom-up analysis would be needed to fully capture these nuances, which is why we keep this high-level overview free.
Glad you enjoyed this piece Pietro. We believe the depressed valuations are indeed influenced by such warnings, contributing to the broader trend of moderating alcohol consumption.
A top down analysis is not sufficient. Large listed companies are global, not U.S. only.
liquor is a very region business. a brand's strength various across different regions. Also, different regions have different demographics and culture both drive demand. lastly, distribution is super important as well. Johnnie Walker is more a mid class drink while luxury in Latin America. Cognac XO sales are stronger in Asia than in the U.S..
besides, Canadian whiskey and tequila are made inside of the countries not just the raw material.
Thanks for your insights Ethan! This is a high-level analysis where we explore the industry and its peers broadly. We recognize that liquor is highly regional, with brand strength, demographics, culture, and distribution varying across markets.
A more granular, bottom-up analysis would be needed to fully capture these nuances, which is why we keep this high-level overview free.
Sometimes when things look bleak there are opportunities. Perhaps there will be activists or consolidations (mergers) that may occur.
It wasn’t that long ago that Brown Forman fought against an offer.
Plus, we don’t know the long term side effects of GLP-1 or at least I don’t. Although, I don’t mind reading about people drinking less.
Excellent article.
Thanks for your thoughtful comment! You're right, challenging times often bring unexpected opportunities.
As for the GLP-1 long term impact, it remains a big question mark.
Glad you enjoyed the article!
Valid analysis Adamos!
Thanks for sharing it to the community. I’m also a subscriber to the newsletter as you (tried to answer that but it can’t be answered).
I’m not a n expert nor an investor in the industry, yet as a physician I have background in health-related matters.
Do you think the recent warning of Surgeon General regarding alcohol consumption may be relevant for the valuations?
Link here where it is stated that no amount of alcohol is sfare (am evidence dating back at least since August 2018): https://www.hhs.gov/surgeongeneral/reports-and-publications/alcohol-cancer/index.html
Glad you enjoyed this piece Pietro. We believe the depressed valuations are indeed influenced by such warnings, contributing to the broader trend of moderating alcohol consumption.
Thanks for sharing this link.