Taste Test: What's the Best Beer Stock?
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More and more Americans opt to shell out an extra couple bucks for craft beer. Beer stocks are booming, but how to best capitalize on the trend? The key to profiting from craft beer is to find a company that makes a few delicious core beers that create loyalty, while offering a changing array of high-quality specialty and seasonal beers that keep consumers interested. Foolish commentary has dissected financial statements from the two craft companies, Boston Beer (NYSE: SAM) and Craft Brew Alliance (NASDAQ: BREW), elsewhere, as well as the two big brewers with craft assets, Anheuser-Busch (NYSE: BUD) and Molson Coors (NYSE: TAP). Here, I look at Beer Advocate’s membership ratings and reviews of these companies’ products to see which fares best with beer aficionados.
Boston Beer keeps making headlines by hitting earnings out of the ballpark. The brand has a strong and loyal following in the Northeast, particularly around Boston, where the company has been headquarter since 1984. Boston Beer makes three dozen different beers and has maintained its quality as it expands. Its flagship beer Boston Lager earned a respectable 87 out of 100 from Beer Advocate’s member reviews, and many of its specialty beers earned north of the 90 mark. But here’s the rub: most of those beers – and the new IPAs, stouts and experimental beers that fill beer snobs’ demands – are difficult to find outside of Massachusetts. Only the Boston Lager has solid national distribution, and lagers are not the most exciting beers.
Craft Brew Alliance
Craft Brew Alliance has three brands: Widmer, Redhook and Kona. The stock surged early in the year after beating earnings expectations repeatedly and changing its ticker from HOOK to the more recognizable BREW. With three brands, Craft Brew Alliance has more diversified offerings nationally than Boston Beer. However, its flagship beers earn lackluster ratings on Beer Advocate: 78 for Kona’s Longboard Lager, 74 for Widmer’s Hefeweizen and 73 for Redhook’s ESB.
The Big Guys
Anheuser-Busch has its hands in the craft beer trend somewhat indirectly through a minority stake in Craft Brew Alliance and distribution agreements with several smaller breweries. It produces and markets Shock Top Belgian White as a craft beer, but the product earns only a 71 from Beer Advocate’s membership. Molson-Coors put a pinkie in the craft beer market by acquiring Blue Moon; Beer Advocate gives Blue Moon’s flagship Belgian White an approaching-decent 78 rating.
The Winner Is…
The flagship beers all rank in Beer Advocate’s average range, except for Boston Lager, which wins by ten points. Scanning over individual reviews, all of these companies produce beers that craft aficionados buy and enjoy and buy again. The specialty and seasonal beers of every brand except Blue Moon garnered higher scores – almost all in the 80s – than the flagship beers. Unfortunately, those beers sell primarily in specialty stores and brew pubs, and only occassionally in supermarkets and corner stores. Additionally, privately-owned regional competitors like Rogue, Deschutes, and New Belgium all earned higher scores on their flagship beers than the publicly traded companies’ products, with the exception of Boston Beer’s Boston Lager, and will continue to be stiff competition. All said, Boston Beer has edged out its publicly-traded competitors for taste.
CallaMarie owns shares of Craft Brewers Alliance. The Motley Fool owns shares of Boston Beer. Motley Fool newsletter services recommend Boston Beer and Molson Coors Brewing Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.