With the tit-for-tat tariff war between the United States and Canada ongoing (not to mention the desired annexation of Canada by a certain American president), the alcohol industry has been making headlines across North America. The US president has threatened a 25% tariff across a variety of industries, with Canada threatening to return the favour in-kind.
A ‘buy Canadian’ furor has taken over as Canadians rededicate themselves to local brands and explore new ones. Canadian retailers have begun pulling American-branded alcohol from their store shelves altogether. Maker of Jack Daniel’s whiskey, Brown-Forman CEO Lawon Whiting stated on an earnings call “That’s worse than a tariff because it’s literally taking your sales away.”
Sentiment will likely carry beyond this initial tariff skirmish, with general feelings between the two countries heating up – although this is more of a show of displeasure towards government policies than the people. The anthem booing at the 4 Nations Face-off hockey tournament highlighted that tension. (Go Team Canada!)
Let’s explore more about the Canadian alcohol industry and highlight some key players in the market.
Data on the Canadian alcohol market
The estimated market size for the alcoholic beverage industry in Canada is expected to hit US $41.6bn in 2025. The revenue of at-home sales (generated in supermarkets and convenience stores) is expected to hit $23.1 bn while the revenue of out-of-home sales (generated in bars and restaurants) is expected to hit $18.5 bn in 2025.
A recent study shows that domestic products represented 59.0% of alcohol sales in Canada. Beer (88.0%) and ciders and coolers (85.0%) had the highest proportion of domestic sales. Spirits (46.1%) and wine (28.8%) had a much smaller proportion of domestic sales.
What are alcohol stocks?
Alcohol stocks refer to publicly traded companies involved in the production, distribution, and sale of alcoholic beverages such as beer, wine, and spirits. These companies can be involved in various aspects of the alcohol industry including brewing, distilling, marketing, and retailing.
Alcohol is often considered a non-cyclical sector (or “defensive” sector), meaning it can remain relatively stable during economic downturns because consumers tend to continue purchasing these products. Investors looking at alcohol stocks should consider factors such as market share, brand strength, innovation in product offerings, and international expansion potential.
Key segments of alcohol stocks
Beer producers
This segment includes companies that produce and sell beer. Some of the largest global beer companies are household names and have expansive brand portfolios catering to both mass markets and craft beer enthusiasts.
Wine companies
Wine producers range from global wine conglomerates to independent vineyards that specialize in premium wines. This segment can be influenced by factors such as vintage variations, consumer trends, and regional wine consumption habits.
Spirits manufacturers
Companies in this category produce distilled alcoholic beverages, including whiskey, vodka, rum, and gin. Spirits often have higher profit margins compared to beer and wine, making them attractive to investors.
Factors affecting alcohol stocks
- Regulatory Environment: Alcohol companies must comply with strict regulations regarding production, distribution, and marketing. Changes in legislation can significantly impact operations and profitability.
- Consumer Trends: Shifts in consumer preferences, such as a move towards craft beverages or lower-alcohol options, can influence company strategy and stock performance.
- Economic Conditions: While alcohol is often deemed recession-proof, overall economic health can impact discretionary spending and subsequently alcohol sales.
- International Markets: Companies with a strong presence in international markets may benefit from diverse revenue streams but also face challenges like varying regulations and currency fluctuations.
Trends in the alcohol industry
1. Declining alcoholic consumption
On a volume-basis, consumption of alcohol has been decreasing of late, highlighting a shift in consumer preferences toward alternative and often lower-alcohol options. The overall industry experienced a 3.8% decline between 2023 to 2024. Beer and wine sales decreased roughly 4.5%, while spirits dropped 0.8%. Ciders and coolers however grew almost 7% – the only sector to achieve growth between 2023-2024.
2. Growth in non-alcoholic beverages
One of the more notable trends in the industry is the growth in non-alcoholic beverages, which reached almost $200 million in 2024, an increase of 24% over the previous year. Non-alcoholic beer accounts for 76% of sales but non-alcoholic spirits had a growth of 67%, as customers seek alternatives to traditional alcoholic spirits.
3. Emphasis on premiumization and craft offerings
Within the Canadian alcohol industry, there is a growing trend toward premiumization and craft offerings. Consumers are increasingly seeking high-quality, artisanal products, resulting in a surge in demand for craft beers, small-batch spirits, and exclusive wines. This shift is driven by a desire for unique flavors, authentic experiences and local ingredients, with craft beer market share growing by over 12% from 2023 to 2024. Limited-edition releases and collaborations are also attracting consumers looking for novelty and exclusivity, highlighting a shift toward quality over quantity in the industry.
Top Canadian alcohol stocks
Despite the overall global decline in alcohol consumption, the alcohol industry is still substantial and a big part of the Canadian economy and lifestyle. Here are some of the top alcohol stocks in Canada:
Molson Coors Canada Inc. (TSX:TPX.B)
Molson Coors Canada Inc. continues to adapt its business strategies in response to evolving market dynamics. In October 2019, the company rebranded as Molson Coors Beverage Company, reflecting a broader focus beyond traditional beer offerings.
Molson Coors’ diverse portfolio includes iconic and best-selling brands such as Molson Canadian, Coors Light, and Rickard’s. The company also offers a variety of craft beers and innovative beverages catering to changing consumer preferences. As part of the larger Molson Coors Beverage Company, it benefits from a broad international footprint and a strong distribution network that spans North America, Europe, and other regions.
Molson Coors Canada reported its financial results for the full year ended December 31, 2024. The company achieved net sales revenue of $11.6 billion, reflecting a slight decrease of 0.6% compared to the previous year. Despite this, net income increased by 18% to $1.12 billion, up from $948.9 million in the prior year.
Additionally, the company returned over $1 billion in cash to shareholders during 2024, reflecting its strong cash generation and commitment to delivering shareholder value. The current dividend yield stands at 2.77%.
Corby Spirit and Wine Limited (TSX:CSW.A)
Founded in 1859 in Corbyville, Ontario, Corby Spirit and Wine has evolved over the years to become a significant player in the alcohol industry. Corby’s portfolio boasts several top-selling brands in Canada, including J.P. Wiser’s Whisky, Lamb’s Rum, Polar Ice Vodka, and McGuinness Liqueurs. The company also represents renowned international brands such as ABSOLUT Vodka, Chivas Regal, The Glenlivet, Jameson Irish Whiskey, Beefeater Gin, and Mumm Champagne within the Canadian market.
Corby reported strong financial performance in the first quarter of fiscal 2025, with revenue reaching $65.1 million, an 11% increase year-over-year. Growth was driven by the acquisition of the Nude brand and a 3% rise in organic revenue. Earnings from operations increased by 31% to $15.0 million, with net earnings rising 24% to $9.3 million. The company also declared a $0.22 per share dividend.
Andrew Peller Limited (TSX:ADW.A)
Andrew Peller Limited is a leading Canadian producer and marketer of wines and craft beverage alcohol products, operating wineries in British Columbia, Ontario, and Nova Scotia. The company offers a diverse portfolio of brands, including Peller Estates, Trius, Thirty Bench, Wayne Gretzky, Red Rooster, Sandhill, Black Hills Estate, Gray Monk Estates, Tinhorn Creek, Conviction, and Raven Conspiracy.
Andrew Peller also operates 101 well-positioned independent retail locations in Ontario under The Wine Shop, Wine Country Vintners, and Wine Country Merchants store names, furthering its direct-to-consumer reach.
The company achieved $105.4 million in revenue for the quarter, marking a 5.2% increase over the prior year period. This growth was primarily driven by sales to big box stores, a new sales channel for the company.