Which beer brand is better for your portfolio?

  Which Beer Brand is Better for Your Portfolio? Dear reader, I hope everyone has recovered from the four-day holiday weekend that many Americans received to celebrate the Fourth of July. If you grew up like me, the weekend involved the beach, grilling, and some good old-fashioned American beers. This year, I spent the holiday in a small town in Spain not far from the Portugal border. I got to enjoy temperatures above 100 degrees Fahrenheit (32 degrees Celsius) and some great food and wine. If you ever find yourself near Cáceres, I highly suggest stopping in for a night. Two of my highlights were seeing the areas where Game of Thrones and House of the Dragon were filmed and eating at my first three-Michelin-star restaurant, Atrio. After 23 courses, I stumbled back to my hotel with a big smile. So while I wasn’t drinking American beer and eating hot dogs, I wasn’t alone. Other Americans have also turned away from traditional American beers like Budweiser in favor of beers from south of the border… Last year, Mexican brew Modelo surpassed Bud Light as the best-selling beer in America. A big reason for the change-up was a controversial advertising campaign from Bud Light that drove a large portion of its loyal customers to other brands. Modelo, Corona, and Pacifico – all Mexican brews owned by Constellation Brands (STZ) – were beneficiaries. Sales of Modelo Especial rose 11% in the second quarter from the previous year while Pacifico’s sales surged 21%. Meanwhile, Bud Light owner Anheuser-Busch InBev (BUD) – the world’s largest beer company – saw its sales fall 9% between the first quarter of 2023 and the first quarter this year. Constellation Brands is a large beverage company that owns the rights to Mexican brews in the United States. It generates about 80% of its total revenue from those sales with the remainder coming from its wine and spirits markets – which have been struggling. It’s also worth noting that the company owns 36% of Canadian marijuana firm Canopy Growth (CGC). Meanwhile, Anheuser-Busch owns the brand rights to those same Mexican beers outside U.S. borders. Constellation has lagged the overall market over the past three years – up just 13% versus the S&P 500’s 28% gain. But if the company can continue to unload some of its wine and spirits brands and focus more heavily on the beer market, it should be able to increase its margins and push its share price to new highs. Anheuser-Busch, on the other hand, has lagged Constellation with a decline of 16% over the same timeframe. But despite the recent struggles with the Budweiser brand, it remains one of the most recognizable in the world. And its beer portfolio has six of the top ten brands by volume. The problem here is its image – especially in the United States. Conservative beer drinks are upset about the controversial marketing campaign, and many continue to boycott the brand. It’s nearly impossible to predict if or when the brand image will change. Only time will tell. But at this point, its stock isn’t pretty. That makes Constellation Brands a better investment for the short term. Longer term, we’ll just have to wait and see how the marketing and sales figures shake out. Cheers! Here’s to the future, [McCall's Signature] Matt McCall Editor, Market Insights [Check Out My Latest Podcast]( At the start of every year, analysts and talking heads put out their predictions for the year ahead. But I have found that most prognosticators are pretty bad at predicting what things will look like just 12 months in the future. So on [the latest episode of the SteadyTrade Podcast]( Tim Bohen and I dive into the first half of 2024 and discuss how things played out compared to forecasts. 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