London-based Diageo plc (DEO) produces, markets, and sells alcoholic beverages worldwide. It provides its products primarily under the Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray, and Guinness brands. In comparison, Victor, N.Y.-based Constellation Brands, Inc. (STZ) produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. It provides its products to wholesale distributors, retailers, and on-premises locations.
The alcoholic beverage industry suffered a setback amid the COVID-19 pandemic, which caused a dip in retail alcohol sales, with several stadiums, concert venues, bars, and restaurants closing or operating at limited capacity. However, alcohol consumption is expected to rebound in the coming months, with the reopening of bars and restaurants with precautions to limit the spread of the COVID-19 virus. Furthermore, with an increase in the young-adult demographic and the increase in millennials’ spending power, the alcoholic beverage industry is expected to grow markedly. According to a Business Wire report, the global alcoholic beverage market is expected to grow at a 2% CAGR through 2025. Therefore, both DEO and STZ should benefit.
