Beer snobs can be overbearing, especially when you just want to drink your $2 PBR in peace. Yet they’re pretentious for a reason: smaller “mom-and-pop” breweries often make better, tastier brews than the mass-manufactured, stadium-friendly AB InBevs of the world.
These small craft breweries, often called “microbreweries,” make significantly fewer batches than even the smallest major beer company. Whereas you can get a Budweiser anywhere in the world and it’ll taste the same, you can only get these smaller beer brands in certain regions of the United States. The companies produce as much as they can and sell them in kegs to local bars. If demand is strong enough, they sell them in cans either through their brewery or through local vendors. From there, they can sell their canned, bottled, and kegged beer through statewide or even nationwide beer distributors, though this requires producing thousands of barrels and large enough infrastructure to distribute products.
While many craft beer companies were gobbled up in recent years by multi-billion-dollar breweries, tens of thousands of these breweries still exist in the United States. A select few are even big enough to sell their stock on major American exchanges. This means that not only can you buy craft beer, you can invest in craft beer companies and potentially make more (beer) money.
Unlike the many multinational beer companies, there are only a few ways to invest in craft breweries. Depending on your style of investing, they may or may not make sense for your portfolio. One thing is certain: investing in craft beer is oodles more interesting that most other stocks.
Sam Adams is a publicly traded company.
The Boston Beer Company ($SAM) is the second-largest craft beer company in the United States in terms of revenue. They’re dwarfed only by D.G. Yuengling & Son, makers of Yuengling. They make millions of barrels of beer each year, sell all over the country, and even make a cider under the Angry Orchard brand. They’re arguably one of the most recognizable craft beer brands, though their status as “craft” is under debate due to their sheer size and publicly traded status.
As a stock, $SAM has seen better days. The company is down 15% since the start of the year and 6.42% in the last year. This is significantly lower than the market average. It’s worth noting that the company’s stock is up nearly 38% in the last five years, and investor sentiment is incredibly high.
The Craft Brew Alliance is composed of several smaller breweries.
The Craft Brew Alliance, or CBA ($BREW) is smaller than Sam Adams, but still the ninth-largest brewery in America. The Portland-based organization consists of Seattle’s Redhook Ale Brewery, Portland’s Widmer Brother Brewery and Omission Beer, the Kona, Hawaii-based Kona Brewing Company, and Square Mile Cider. The company, which was founded in 2008, is partially owned by AB InBev, who also handles the brewery’s distribution. At the same time, CBA is still small enough to be considered a craft brewery.
$BREW performs rather well on the stock market. Though the stock is only up .59% since the beginning of the year, the stock’s value increased by a whopping 72.75% in the last year alone. Many investors believe that CBA will eventually become an entirely owned subsidiary of AB InBev, which could shed them of their craft brewery status.
Invest in craft beer…or just buy craft beer.
You could buy these two stocks, though neither of them are currently beating the S&P 500 market average. You could also invest in macro-breweries, which are significantly more popular with investors than $SAM or $BREW. Before you decide to invest in any brewery, be sure to first do your research. Otherwise, you could end up unwittingly making a bad investment.
If you want to see any craft brewery prosper and grow, you could also just buy their products. Every sale matters to small breweries serving single counties or states. The more sales they make, the more they can grow. The more they grow, the more they can make delicious beer. As you can see, there are only a couple public craft breweries out of tens of thousands in the United States. This will likely change in the coming years as craft beer grows in popularity. By supporting your local craft brewer, you help them edge out the macro brewery competition and prosper in a super-competitive field. Plus, you get to enjoy some great beer while you’re at it. What’s there to lose?