One Name to Know for St. Paddy’s Day & Beyond

Mar 17, 2023

For over 1,000 years, the Irish have celebrated St. Paddy’s Day.

That means Irish folk were breaking Lent prohibitions in honor of Saint Patrick 500 years before Christopher Columbus stumbled across North America.

And during this millennia of rowdy remembrance, St. Paddy’s Day festivities have grown to a global tradition.

There are millions of “Kiss Me I’m Irish” t-shirts, leprechaun hats, clovers emblazoned on anything and everything, pinches for those not wearing green, and plenty of drunken shenanigans and fist fights.

Not to mention the parades!

Oh, how Americans love parades.

Interesting fact: the first ever St. Patrick’s Day parade was on March 17, 1601 in St. Augustine, Florida. That’s how integral watching people walk in a line for hours on end is to our DNA.

Now, we could pinch, punch, and challenge each other to drinking contests to settle if all of this is the most respectful way to honor a British teenager who was kidnapped and made a slave in Ireland, but later escaped and returned with Christianity… but why bother.

The fact is, St. Paddy’s Day is really known for only one thing today: drinking into oblivion.

I’m completely against binge drinking and consuming alcohol in an unsafe manner.

But St. Paddy’s Day does provide the perfect catalyst to cover one of my favorite sectors: Spirits and alcohol.

So, put down that “Borg” for the next few minutes. Let’s briefly delve into the changes underway in the alcohol industry, the opportunities for potential profits, and some names to know, not just for St. Paddy’s but for all the days that lie ahead.

Slainte to this New Trend

I’ve been covering the spirits and alcohol sector for more than a decade.

And it’s treated me well, rewarding me with some of the largest gains in my career.

But what I love about the spirits and alcohol segment is that it isn’t stagnant.

There are seasonal changes in consumption.

And beyond that, preferences change from generation to generation.

For instance, the alcohol of choice for the Silent Generation is wine (58.8%). Baby Boomers also tend to prefer wine (41.8%) to beer or spirits.

But for Generation X, Millennials and Gen Z, liquor is the go-to.

Of course, part of that variance is a product of aging and medication restrictions. Someone on antihypertensives isn’t going to be pounding Jack & Cokes or slamming a “Three Wise Men.”

But there’s also broader societal shifts that take place.

We saw Millennials shift away from beer and turn to wine earlier than previous generations. And then the later half of the Millennials and Gen Z became obsessed with hard seltzer, hard sodas, and hard lemonades. Which flipped the entire beer industry on its head and is still having impacts.

But now, there’s a new trend. Thankfully, it’s one I can get behind. It also fits nicely into today’s theme.

Beer Goes Flat

Whiskey is having a moment in the sun… even though it’s a cloudy St. Paddy’s Day where I’m at.

American whiskey sales grew 10.5% to $5.1 billion in 2022.

And Irish whiskey is flying off the shelves as well.

In 2022, the Irish Whiskey Association reported exports surpassed $1 billion for the first time ever.

Meanwhile, the Distilled Spirits Council noted Irish whiskey sales generated $1.4 billion in revenue last year, spurred by record-breaking growth.

Irish whiskey is now the fourth-fastest growing spirits category in the U.S.

But another major milestone was set in 2022. And it’s one investors can’t overlook…

For the first time ever, revenue from spirits have surpassed those of beer in the U.S.

Now, there are two names at the forefront of Irish whiskey growth. And they both happened to be owned by the same distiller...

Pernod Ricard SA (PRNDY) is the No. 2 wine and spirits maker in the world. Of the top 100 spirit and wine labels worldwide, the company holds 17 of them.

It’s the proud owner of Jameson Irish whiskey. This is key as Jameson is the fastest growing whiskey brand globally. And of course, no St. Paddy’s Day is complete without a shot or two… maybe even a bottle, of Jameson.

It also owns Redbreast, which is the largest selling single pot Irish whiskey in the world.

But Pernod’s whiskey brands include Ballantine’s, The Glenlivet, Lot No. 40, Spot Whiskies, and TX. Not to mention a whole host of gins, vodkas, and other spirits.

For the first half of its fiscal year 2023 (reported in February), the company announced 12% organic growth in revenue to $7.6 billion. All spirits segments were up double-digits, with scotch a strong driver.

And it expects to enjoy continued strength throughout the year, even as it raises prices.

Year-to-date, Pernod shares are outperforming the Dow Jones Industrial Average and the S&P 500. Maybe not surprisingly, March has historically been a strong month for shares. They’ve ended the month with a gain in 10 of the last 14 years.

But don’t fall into the trap thinking that this is only an opportunity for St. Paddy’s Day or that it’s too late to open a stake. The momentum in spirit and whiskey sales should be something to celebrate for the months and years ahead.

Keep in mind, it’s only a matter of time before Bud Light Seltzer, Truly, and White Claw go the way of Seagram’s Coolers and Zima.

May the best day of your past be the worst day of your future,

Matthew

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One Name to Know for St. Paddy’s Day & Beyond

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