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Diageo: The Hidden Gem in Your Drink Cabinet What if I told you there’s a company behind some of the most iconic drinks in the world, quietly raking in profits while you enjoy your favorite cocktail? Meet Diageo. They own a 34% stake in Moët Hennessy and are the global king of premium drinks. Think Johnnie Walker, Smirnoff, Guinness, and Crown Royal. Impressive, right? Now, here’s the kicker: Diageo’s magic lies in its unbeatable moat. Their brands have cult-like loyalty, making them nearly immune to competition. Ever tried launching a new whiskey brand? Good luck. The long maturation process creates sky-high entry barriers. Plus, in today’s world, people prefer sipping better, not more. This premiumization trend plays right into Diageo’s hands, giving them strong pricing power. However, recent challenges have created an intriguing opportunity. The LatAm and Caribbean regions are suffering from excess inventory, and Diageo has misjudged demand, leading to a double-digit decline in topline revenue in these regions. The LatAm and Caribbean markets make up 10% of the company's total revenue. Additionally, the new CEO is fairly new and untested, and the CFO was let go due to poor financial forecasting, planning, and communication. Because of these reasons, the stock is trading at a compelling 17x PE NTM and has a free cash flow yield of ~5%. But remember, this is a resilient business with secular demand from emerging markets, which make up 40% of the total topline. Diageo holds a mere 6% of the total beverage alcohol market—a market worth a staggering $962 billion globally. And guess what? Spirits, their forte, are growing twice as fast as beer and wine. With a 6.3% organic growth rate over the past six years and projections of 5-7% CAGR till 2027, they’re on a roll. Diageo’s capital-light model means they churn out high returns on invested capital, scaling effortlessly. In a nutshell, Diageo is not just surviving; they’re thriving. They’ve cracked the code on how to blend tradition with innovation, making them a force to be reckoned with in the beverage world. So, next time you sip that drink, remember the hidden gem making it all possible: Diageo.

#Top #beverage #Mexico Top Alcoholic Beverage Brands 2024 Corona Extra regains title as world's most valuable beer brand with 40% growth in brand value, followed by Heineken and Budweiser. Iconic Mexican beer brand Corona Extra has regained its position as the world's most valuable beer brand, with its brand value growing an impressive 40% to $10.4 billion, surpassing Heineken (up 18% to $9.0 billion). This significant growth solidifies its position as the most valuable brand in the Brand Finance Beers 50 2024 ranking, making it the fastest growing beer brand in the world. Budweiser (brand value increased 11% to US$7.4 billion) ranked third. Corona's strategic initiatives have enhanced its brand awareness and reputation beyond its appeal among consumers. Earlier this year, Corona was announced as an official sponsor of the Paris 2024 Olympic Games, marking a historic moment as it is the first beer to sponsor the event. Four other Mexican beer brands also made the list: Modelo Especial (up 24% to $5.2 billion), Tecate (up 26% to $2 billion), Victoria (up 22% to $1.5 billion) and Dos Equis XX (up 16% to $841 million). Mexico is the second country with the most brands on the list after the United States, which has nine brands on the list. We can help your brand grow quickly, don't hesitate to contact me.

Hello GUINESS, HEINEKEN Beverages, Smirnoff Ice, Star Larger, Hennessy, Johnnie Walker,Casamigos Tequila, Campari Group, Gordon's Dry Gin, Moët Hennessy, Moët & Chandon— can we talk? They say, "Shoot your shot," so here we go. We know you're the big players—the household names, the life of every party. But do you know what Nigerian consumers are saying?  Nigerian consumers are whispering, and what they're saying can change everything.  - 92% of them are deeply concerned about counterfeit drinks. That's not just anxiety—that's a trust issue with a capital T.  - 71% of them are begging for tamper-evident seals. It is the little things that make them feel secure.  - 73% are ready to pay more if they are sure that the drink they are getting is genuine. This shows that authenticity isn't just a buzzword but a business strategy. So, how about we team up? With Mooyi, you are equipped with the know-how to keep you one step ahead of your competitors while keeping your brand untouchable. Let’s make sure your brand’s legacy is as pure as the drinks you make.  Ready to get valuable insights to stay ahead of the curve?  Email [email protected] to get the full insights and book a demo.

A very good article in ft.com regarding the recent share price💲performance of the leading global alcohol 🍸 🍷 🥂 companies. Purveyors of alcoholic beverages have clearly had a terrible time of late. Shares in Diageo, Campari, Pernod Ricard and Rémy Cointreau are down between 20 and 40 per cent in the past 12 months. There is no shortage of good reasons. Diageo’s stumble is in part home-grown, given its stocking troubles in Latin America. Rémy Cointreau and Pernod Ricard have been hit by fears that China might impose tariffs on brandy. Most worrisome of all for companies across the sector is the fact that the US — the world’s most lucrative alcohol market — has gone into reverse, with spirit volumes down 3.3 per cent in 2023. However all this looks overly despondent. Despite current wobbles, selling alcoholic drinks remains a good business. When the Covid-era hangover finally clears, this will be a sector in which annual volumes grow by perhaps a couple of percentage points a year, prices rise and consumers increasingly choose premium drinks. We can all say cheers 🍸 to this! **this aricle is not investment advice** #alcohol #beverages #ft #financialtimes Lars Jensen Paul Villis Michel Aubanel Gilles Halotel Carol Dunne Jean Noel Ortal Jean-Philippe Delforge Kristof König Linda Chatton Stephen Rannekleiv Jim Watson Bourcard Nesin Francois Sonneville Virginia Traldi David Deeley Brian Short William Lynch Thomas Hahlin Ahlinder Sheelagh Pentony

The global alcoholic beverage sector encompasses a diverse industry engaged in the production, distribution, and retail of various alcoholic drinks, including beer, wine, spirits, and other beverages. Driven by the enduring allure of alcoholic beverages and the cultural significance attached to them, companies operating within this sector strategically adapt to evolving consumer tastes and market dynamics. To navigate these shifts, businesses frequently pursue partnerships, collaborations, and acquisitions to diversify their product offerings, cater to niche preferences, and expand their global presence. Cross-border mergers and acquisitions are common strategies, facilitating entry into new markets, alignment with regional preferences, and the expansion of beverage portfolios. The sector is heavily influenced by trends such as the growing demand for premium products, increasing awareness of craft and artisanal offerings, and the rise of online and offline retail platforms. Within this dynamic landscape, strategic decisions regarding partnerships and acquisitions are pivotal in shaping companies' market positions, driving innovation, and addressing challenges such as sustainability and changing consumer preferences worldwide. Key players in this consolidation include, among others, Diageo, Anheuser-Busch InBev, Pernod Ricard, Constellation Brands, Heineken, and Bacardi Limited. Fredericks Michael & Co. advises alcoholic beverage companies and private equity firms on their acquisition and divestiture strategies. We are pleased to provide our update on the 2024 alcoholic beverage sector from the perspective of an M&A advisor.

Drinks giant Coca-Cola Hellenic Bottling Company (HBC) completed the acquisition of the Finnish vodka brand from Brown-Forman in November 2023. “We are pleased to begin our partnership with Proof Drinks in the UK as part of our new ownership of Finlandia Vodka. Proof Drinks has a proven track record of strong customer relationships and will support our strategic vision to bring the brand to further heights in the UK,” said Yannis Athanasiadis, premium spirits director of owned brands at Coca-Cola HBC. Proof Drinks was established in 2010 and specialises in importing, distributing, selling and marketing premium drinks brands. John Vider, manager director at Proof Drinks, commented on the new partnership: “We are thrilled to welcome Finlandia Vodka to Proof Drinks. As a brand known for its exceptional quality and rich heritage, Finlandia Vodka offers a compelling proposition which complements our portfolio. “We look forward to bringing its unique taste and unparalleled craftsmanship to our customers, further strengthening our commitment to offering the finest spirits in the market.” Established in 1970, Finlandia is bottled by Anora Group in Finland under a long-term production services agreement and has global annual sales of 2.7 million nine-litre cases. In addition to the pure expression, the brand offers several flavoured versions, such as grapefruit, mango and Nordic berries, as well as a botanical line of cucumber and mint, and wild berry and rose. Finlandia joins Proof Drinks’ portfolio of spirits, which includes Ramsbury Single Estate, El Bandarra apéritif, Cazcabel Tequila, Heaven Hill brands and Compass Box Whisky. SOURCE https://buff.ly/3LZQOcu

Campari plans to offload some brands amid dampened spirits demand Priority brands like Aperol and Skyy Vodka will remain within the Italian beverage company’s portfolio as it aims to simplify its approach, the CFO told investors. Italian spirits business Campari sees challenges in the U.S. spirits market “persisting” as retail stores tighten stocks amid muted demand, the company’s CFO and interim co-CEO Paolo Marchesini told investors this week. Campari — the owner of dozens of spirits brands from whiskeys to rums to aperitifs — believes the spirits market will stabilize in 2025 as consumers grow more confident in their economic situation. In the meantime, the company is focused on growing brands in emerging and trendy categories. Marchesini said the company plans to offload some of its spirits brands in order to cut costs. Its global priority brands, like Skyy Vodka and Aperol, he said, will not be for sale despite their current challenges. Marchesini pointed to the growth of its brands in U.S. bars and restaurants as a highlight in its most recent quarter, growing 1% compared to a 6% decline across the category. Marchesini told investors the company’s current difficulties are cyclical, and the logic of selling some brands is “about simplifying portfolio management.” One brand the company pointed to as a positive asset is Espolon tequila, which saw 18% growth so far this year. The CFO said the brand, which is benefiting from overall growth in tequila in recent years, is in a unique position. Espolon is gaining market share as consumers trade down from more expensive “super-premium” varieties of the spirit, while other drinkers trade up from the least expensive varieties, he said. “We see it in a sweet spot at $27 to $29 per bottle, so it can only accelerate,” Marchesini said. In order to revive demand for its spirits, Campari is also trying new pricing strategies in a bid for competitive advantage. In select states, it is lowering the price of Skyy relative to rival vodka brands, which the CFO said is proving beneficial. “It seems that overall, we’re achieving net positive gross profit impact. So, we will be more focused on a state-by-state basis as opposed to going broad with one single price policy overall,” Marchesini said.

Big news 🚨 Is premiumization the only way forward for wine and spirits portfolios? The spirits landscape is evolving, and so are the portfolios of its key players. Constellation Brands is divesting its ownership of Svedka Why? It’s all part of a strategic pivot to focus on higher-end wines and craft spirits—where they believe the future lies. Svedka’s vibrant branding and innovation in flavored vodkas and RTDs (like its Spiked Seltzer line) have made it a well-known name, but it’s no longer aligned with Constellation’s focus on premiumization. Instead, Constellation is doubling down on brands like High West Distillery and Casa Noble Tequila—products with strong identities in the craft and high-end market segments. This move follows years of calculated shifts. The wine portfolio saw significant restructuring in 2021 and 2022, with mainstream labels sold off to prioritize premium and fine wine offerings. Despite this, the company’s beer division—home to Modelo and Corona—remains its strongest performer. For Sazerac Company, acquiring Svedka adds a fresh layer of flavor innovation to its already robust portfolio, including iconic names like Fireball and Buffalo Trace. This purchase signals their confidence in capturing flavored vodka’s younger, adventurous consumer base. What This Means for the Industry: 1. Premiumization is Priority: As consumer demand for quality and experience grows, mainstream brands face a harder battle for relevance in high-stakes portfolios. 2. Strategic Shifts in Spirits: Constellation’s divestment reflects broader shifts in the beverage industry, where companies are moving resources to where they see long-term growth. Is focusing exclusively on premium and craft the future of the spirits industry, or is there still space for mainstream favorites?

Alcoholic Beverages - Pernod Ricard, the French wine and spirits giant, is actively prioritising its premium spirits portfolio as the company heads into 2025. As consumers increasingly seek out quality over quantity, premium spirits are gaining traction in both on- and off-trade channels. Pernod Ricard’s strategy appears well-suited to capitalise on this demand #premiumspirits #spirits #gin #drinks #whisky #cognac #Premiumisation #luxury #finespirits

Constellation Brands will sell Svedka vodka to Sazerac Company as its wine and spirits segment struggles. The deal is expected to close in the coming months, but no transaction details were disclosed. Sazerac is a privately-owned, New Orleans-based alcoholic beverage company that owns brands like Buffalo Trace bourbon, Fireball Cinnamon Whisky, Southern Comfort. Investors and analysts appeared to welcome the news after several quarters of weak Wine & Spirits performance from the Modelo and Corona maker. “While the existing Wine division remains, the divestment of SVEDKA is a clear positive for the segment’s future growth prospects,” said Bernstein analyst Nadine Sarwat, CFA. “It also signals that management is willing to make tough decisions to evolve the business, another positive for corporate governance.”