Top 4 Alcohol Stocks to Track Amid Inflation & Tariff Headwinds

Players in the Zacks Beverages – Alcohol industry remain under pressure as inflation continues to drive higher costs across labor, transportation and raw materials. Rising ingredient prices, shipping expenses and packaging costs are compressing margins, while elevated spending on marketing, promotions and day-to-day operations is weighing on profitability. Adding to these challenges, tariffs pose a further risk to the U.S. beverage alcohol market by increasing prices for imported brands, softening consumer demand and straining supply chains.

Despite these headwinds, the industry continues to uncover meaningful growth opportunities. Premiumization remains a key tailwind, with consumers increasingly gravitating toward distinctive, higher-quality offerings. Categories such as ready-to-drink spirits, canned wines and cocktails, hard seltzers, ciders, and flavored malt beverages are reshaping the competitive landscape, appealing to younger consumers while also attracting established drinkers seeking convenience and variety.

To capitalize on these trends, leading players, including Anheuser-Busch InBev BUD, Constellation Brands Inc. STZ, Brown-Forman Corporation BF.B and The Boston Beer Company Inc. SAM, are intensifying investments in innovation, technology and premium brand positioning. While volatility in input costs and tariffs may continue to pressure margins in the near term, strong brand equity and premium-led innovation are expected to remain the industry’s primary growth drivers.

About the Industry

The Zacks Beverages – Alcohol industry mainly comprises producers, importers, exporters, marketers and sellers of alcoholic beverages like beer, craft beer, ciders, wine, rum, whiskey, liqueurs, vodka, tequila, champagnes, brandy, amaretto, RTD cocktails and malt. Some industry players also produce and sell non-alcoholic beverages like carbonated soft drinks, sparkling waters, bottled water, energy drinks, powdered and natural juices, and RTD teas. The companies sell products through wholesalers and retailers like supermarkets, warehouse clubs, grocery stores, convenience stores, package stores, drug stores and other retail outlets. The industry participants also sell beer directly to consumers in cans and bottles at restaurants, pubs, bars and liquor stores. Some brewers operate brewpubs or tasting rooms at breweries, offering consumers the freshest beer.

What's Shaping the Future of Beverages - Alcohol Industry

Elevated Costs: The alcohol industry continues to grapple with elevated cost pressures from inflation across labor, transportation and raw materials. Higher prices for key inputs such as grains and fruits, along with rising costs for packaging, co-packing, fuel and logistics, have pushed up production and operating expenses, weighing on the gross and operating margins.

In addition to input inflation, companies are facing increased spending on advertising, promotions and SG&A as they step up brand investments, media activity and local market execution. Higher freight costs tied to volume growth, along with rising wages and discretionary expenses, are contributing to margin pressure and SG&A deleverage. Many industry participants expect these headwinds to persist in the near term, continuing to challenge profitability.

Potential Tariff Impacts: Tariffs imposed by President Donald Trump are expected to create severe headwinds for the U.S. beverage alcohol industry, with implications for pricing, supply chains, trade flows and consumer demand. Tariffs on imports from Canada, Mexico and China raise input and landed costs for a range of imported spirits and beers, including well-known international brands. These higher costs are likely to be passed on to consumers, resulting in price increases that could weigh on volumes. At the same time, supply chains may face disruption as companies reassess sourcing and logistics, potentially leading to delays, tighter availability and higher operating expenses. As prices rise and choice narrows, consumers may trade down or reduce consumption, pressuring industry sales and margins.

Premiumization & Product Diversification: Premiumization remains a core growth engine for the alcohol industry as consumers increasingly gravitate toward distinctive flavors, higher-quality offerings and experiential brands. In response, beverage companies are broadening their portfolios to capture demand for premium and super-premium products while extending beyond traditional beer, wine and spirits. The category mix is rapidly evolving, with strong momentum in craft spirits, low- and no-alcohol offerings, RTD spirits, canned wines and cocktails, hard seltzers, cider, and flavored malt beverages. As consumer preferences fragment and occasions diversify, sustained innovation and agile product development have become critical for brands seeking to remain relevant, defend pricing power and drive long-term growth.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Beverages – Alcohol industry is a 15-stock group within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #218, placing it at the bottom 11% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential.

Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.

Industry Underperforms S&P 500

The Zacks Beverages – Alcohol industry has outperformed the broader sector and underperformed the S&P 500 in the past year.

The stocks in the industry have collectively returned 10.6% in the past year, whereas the Zacks Consumer Staples sector has risen 4.2%. Meanwhile, the Zacks S&P 500 composite has rallied 17.2%.

1-Year Price Performance

Beverages - Alcohol Industry's Valuation

Based on the forward 12-month price-to-earnings (P/E) ratio, commonly used to value Consumer Staples stocks, the industry is currently trading at 15.31X compared with the S&P 500’s 23.37X and the sector’s 17.23X.

Over the last five years, the industry traded as high as 26.77X, as low as 13.77X and at the median of 19.19X, as the chart below shows.

Price-to-Earnings Ratio (Past 5 Years)

4 Alcohol Beverages Stocks to Keep a Close Eye on

None of the stocks in the Zacks Beverages – Alcohol space currently sports a Zacks Rank #1 (Strong Buy) and a Zacks Rank #2 (Buy). However, we have selected four stocks with a Zacks Rank #3 (Hold) to watch from the same industry. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let us have a look at the companies.

Anheuser-Busch InBev: Also known as AB InBev, this is a global brewing leader with a portfolio of iconic brands spanning diverse geographies. Its leading positions across key markets and expansive global footprint provide meaningful scale advantages, enabling efficient operations and the ability to grow multi-country brands worldwide. The company continues to benefit from resilient consumer demand for its core brands, supported by strong business momentum, driven by disciplined execution, sustained brand investment and an accelerated digital transformation agenda. Premiumization remains a central growth lever, as consumers increasingly trade up within the beer category.

Beyond core beer, AB InBev is steadily expanding its Beyond Beer portfolio, encompassing ready-to-drink offerings such as canned wines and cocktails, along with hard seltzers, ciders and flavored malt beverages. This diversification strategy is enhancing relevance across occasions and consumer segments, while providing an incremental growth runway and supporting top-line momentum. The Zacks Consensus Estimate for AB InBev’s 2026 sales and earnings suggests growth of 6.2% and 13.6% from the year-ago period’s reported figures. The consensus mark for the company’s 2026 earnings has moved up 0.7% in the past 30 days. BUD has gained 40.1% in the past year.

Price & Consensus: BUD

Constellation Brands: The Victor, NY-based third-largest beer company and a leading, high-end wine company in the United States continues to benefit from a sharp focus on brand building and a steady cadence of innovation. The company’s premiumization strategy remains a key growth driver, led by the sustained strength of the Modelo and Corona brand families and continued traction across its Power Brands portfolio. Its beer business is benefiting from premium and above-premium trends, supported by growth in traditional beer and adjacent categories, such as flavored beer, seltzers, RTD spirits and flavored malt beverages.

STZ is actively investing to extend the momentum of its Power Brands, aligning innovation with evolving consumer preferences and delivering successful product launches. Meanwhile, the company’s digital momentum continues to build through platforms, such as Instacart, Drizly and retailer-owned channels, reflecting consumers’ growing preference for convenience-driven purchasing. The Zacks Consensus Estimate for STZ’s fiscal 2026 earnings per share has moved up 1.2% in the past 30 days. The consensus estimate for fiscal 2026 sales and earnings suggests declines of 10.7% and 15.5%, respectively, from the year-ago period’s reported figures. The STZ stock has lost 14.4% in the past year.

Price & Consensus: STZ

Brown-Forman: Based in Louisville, KY, this is a global spirits company that manufactures, distills, bottles, imports, exports, markets and sells a broad portfolio of premium alcoholic beverages. The company’s growth strategy is anchored in premiumization, with a clear focus on high-quality, premium and super-premium spirits that support brand equity and margin resilience. The portfolio has been streamlined around core power brands such as Jack Daniel’s and Woodford Reserve, complemented by successful additions like the Jack Daniel’s and Coca-Cola RTD and the integration of super-premium labels Gin Mare and Diplomático.

Emerging markets continue to provide a strong growth offset, driven by rising middle-class demand and momentum across the Jack Daniel’s family. Disciplined pricing, innovation, distribution evolution and tighter cost control underpin long-term value creation despite near-term pressures. The Zacks Consensus Estimate for BF.B’s fiscal 2026 sales and earnings suggests declines of 3.3% and 8.7%, respectively, from the year-ago period’s reported figures. The consensus mark for fiscal 2026 earnings has been unchanged in the past 30 days. BF.B has declined 20.7% in the past year.

Price & Consensus: BF.B

Boston Beer: The company is the largest premium craft brewer in the United States, supported by a diversified portfolio of globally recognized brands. It produces beer, malt beverages and cider through a mix of owned breweries and contract partners. A strategic focus on disciplined pricing, product innovation, brand building and expansion into non-beer categories is strengthening the operating performance and competitive positioning. Growth is increasingly driven by the Beyond Beer segment, which continues to outpace the traditional beer category and offers a longer-term runway.

SAM is executing a focused three-pronged strategy centered on revitalizing the Samuel Adams and Angry Orchard brands, driving structural cost efficiencies and investing in sustained innovation. Savings from productivity initiatives are being redeployed into brand and product development to support durable growth. The Zacks Consensus Estimate for Boston Beer’s 2026 sales and earnings suggests growth of 0.3% and 19.5%, respectively, from the year-ago period’s reported figures. The consensus mark for the company’s 2026 earnings has been unchanged in the past 30 days. SAM has declined 16.2% in the past year.

Price & Consensus: SAM

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Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report
 
Brown-Forman Corporation (BF.B): Free Stock Analysis Report
 
Constellation Brands Inc (STZ): Free Stock Analysis Report
 
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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