Last Call for Alcohol Stocks?

Data is everywhere, but is it ready for consumption? Morningstar developed the language of global investment data so you have the right ingredients to help you shine. Morningstar, where data speaks. They come out and they stay out till about like, like midnight, 1 AM, and then they all go home, and then We're just stuck with an empty bar at the end of the night. Hello and welcome to the Baron Streetwise Podcast. I'm Jack Howe, and the voice you just heard is Nnamdi Ananwesi. He's a co-manager at Ethel and Tank, which is a college bar. It's in Columbus, Ohio, right at Ohio State University. And as Nnamdi says, it's not quite as bustling as it once was. And it's not just Ethel and Tank, and it's not just Columbus. It's not even just bars. It's alcohol sales pretty much everywhere. Alcohol has fallen into broad decline. Young people are leading the way. Share prices of brewers and vintners and distillers are plunging in response. This is not just about Dry January. It's not just about cannabis or the Surgeon General's warning on alcohol. It's complicated. Ahead, we're going to hear from a variety of sources and we're going to talk about the trend and where it's headed, what it means for the shares. Listening in is our audio producer Jackson. Hi Jackson.

Hey Jack.

We heard in this podcast a couple of weeks ago from Bill Shufelt. He's the founder of Athletic Brewing. It's a booming non-alcoholic beer company, and this will be the flip side of that. This is about declines in the alcohol business. I had some Athletic beer the other night. And by some, I mean, you know, it's non-alcoholic, but there is such a thing as drinking too much of it. What happened was I had— we had a poker night with the boys where I live, and it was kind of out in some little dome structure that one of the neighbors set up in his woods with lights and music and everything like that. And there was snow falling, and a good time was had by all. And there were pretzel rods, 2 canisters as I recall, and I was cracking open some Athletics. I brought a 6-pack, and before you know it, I think I made my way through 5 of them by the end of the night. And, you know, I wasn't drunk, but like, as a friend said to me the next day, you have 5 cans of anything, you're going to feel it the next morning. 5 cans of Coca-Cola and you'll wish you hadn't. It wasn't so bad. It was not a hangover, but I did have a bit of a dry mouth.

I like this idea that you have a middle-aged dad treehouse clubhouse that you all go to.

The Keebler Club, the Treehouse Elves. Yeah. So I guess you got to do all things in moderation, including moderation. I don't think that I've had alcohol in a little while now. Wasn't really by design. I didn't have quite a dry January, but I've had a dry, like, last 3 weeks of January or something like that. I don't know how long it'll last. I do worry a little bit about the health effects of drinking. I feel like we've kind of come full circle.

Yeah, I remember the one glass of red wine a night. Helps you live to 100.

Well, there was a famous 60 Minutes episode. It was in 1991, and there's a newsman named Morley Safer, and he went to Lyon to some bistro, and he sort of kicked off this discussion about the French paradox. Each French man, woman, and child consumes a full 40 pounds of cheese each year. And the French paradox is like, I don't know, French people are over there eating, you know, cheese and butter and things like that. And they live to be 1,000. And, you know, they're healthier than Americans. And so, you know, what's going on with that? And then it was like, maybe it's the glass of wine that they have every day. Maybe that's the secret to health and long life. So the answer to the riddle, the explanation of the paradox, may lie in this inviting glass. And then wine sales boomed in the US. Everybody was learning how to pronounce Cabernet, and it's not Merlot, Jackson, it's Merlot.

I always like to offer guests, uh, Sauvignon Blanc.

It's a little Inspector Clouseau, but okay. So wine took off, and we've had many rotations and movements in what has been popular in alcohol in the decades since then. There was a big craft beer movement. Now we all have 400 choices of beer when we go to our supermarkets. There was a powerful movement from beer and wine towards spirits and cocktails, and there was the premiumization of everything— vodka, gin, whiskey, tequila, so on. And of course, there was a seltzer boom during the pandemic. Seltzer is now on its way down. The latest is RTD, or ready-to-drink. We've talked about that on this podcast, the canned cocktails. Another pocket of growth is flavored malt beverages. Which is just kind of a, a base that you use for a drink. Like if you make a hard tea, hard tea is doing well, but those categories are not large enough to make up for what's going on overall. I'm looking at a Nielsen IQ report. Total alcohol sales last year, $112 billion. That's down 1%. 1% is no big whoop, but when you break down the numbers, you find out that price increases are helping to offset sharper volume declines. Beer last year down 2.9%, wine down 4.4%. At first glance, spirits appear to be holding up. There's a 1.8% increase for spirits. But then when you take the spirits category and you strip out these ready-to-drink cocktails and you just look at, you know, bottles of bourbon, bottles of gin, and so forth, you find a 2.3% volume decline. That's striking because that's been such a tremendous growth category. One data source pointed out that in 2023, volumes for spirits in the US declined for the first time in 30 years. Even ready-to-drink, Nielsen finds good growth there in terms of dollar amount, 3.8% last year, but that's on flat volume. Another data source found that ready-to-drink cocktails had started to decline in some states. Okay, so that's one group of signs, what the data companies are saying about alcohol sales. For another group of signs, we can look at the companies that make and sell alcohol and their shares, and the signs there are pretty negative. Let's look at some share price changes over the past 2 years. Brown-Forman, that's the company that makes Jack Daniel's Tennessee whiskey. There's actually signs of a whiskey glut right now, and that's a problem for Brown and others. The clearest way to see that is to look at the performance of a company called MGP Ingredients. That's a smaller company. They make whiskey and they sell it to other companies who brand it. It's funny because MGP is based in Kansas, so people might think that they're drinking whiskey from one of these other states. They might not realize they're drinking Kansas whiskey. And there has been a plunge in companies buying their whiskey. So that stock is down 65% over 2 years and they're slashing production. Brown-Forman just announced it's going to lay off 12% of its workforce and close a big barrel plant that it has in Kentucky. We'll come back to whiskey. Let's switch to beer. How's the saying go, Jackson? Liquor before beer, never fear.

It's— I just know the never been sicker is the more memorable part, right?

That's just science, clearly. Anheuser-Busch. Now look, mass market beer has been a challenge for a long time. So that stock is down not as much as some of the others, but that's because it has really been a long-term decliner. Some of the others have started falling only recently. I forgot Diageo. Got to go from beer to liquor. Now we're in trouble. Diageo down 36% over the past 2 years. That's the company that makes Johnnie Walker and they make Guinness. Okay. Boston Beer. This is crazy. Boston Beer. If you had bought that stock 10 years ago. We all know that Boston Beer was once a longtime great growth story in craft beer. I think it was the company that really kicked off the craft beer movement in America. And then beer slowed down. And then during the pandemic, hard seltzer took off. And there were really two brands to speak about. One was made by a company called Marc Anthony, and that brand was called White Claw. Ain't no laws when you're drinking claws, right, Jackson? I should point out, there are all the regular laws do apply when you're drinking White Claw.

That's their catchphrase.

It's the catchphrase of guys who had turned their dorm rooms into beach scenes using inflatable pools and some sand that they brought in.

And now that makes sense.

And the other big brand was Truly, and that was the brand owned by Boston Beer. By the way, Boston Beer is 85% not beer these days. It's a lot of hard tea and hard seltzer and, uh, cider. So anyhow, there was a seltzer boom, and then everyone and their uncle Anheuser got in on the hard seltzer business, all the big brands. And that was just in time for a lot of those hard seltzer early adopters to decide, you know what, I think I like ready-to-drink cocktails more, I'm going to switch to those. So the bottom line is that if you had bought Boston Beer stock 10 years ago, at one point during the pandemic, you were up more than 300%. And if you had said at that point, I'm not selling, I'm sticking with it, it's only gonna get better from here, by now on your 10-year investment, you would be down 20%. I'll tell you about one more stock, and that is Constellation Brands. And that one is down 25% over the past 2 years. It's not the biggest decliner,, but it fell 17% in a day after its latest quarterly report. We've talked about this company before. This is a company located around the Finger Lakes of New York State, and it got its start many decades ago selling something called Wild Irish Rose, selling like this kind of sweet, gross wine that, you know, no one's putting out for guests, right? That's the kind of thing best enjoyed alone and probably out of a paper bag. Anyhow, the company parlayed that into this, I think, pretty modest portfolio of spirits and wines, although they did get some big brands and wines. But their real claim to fame was when Anheuser bought Modelo, the Mexican brewer, more than a decade ago. For antitrust reasons, Anheuser was forced to sell US distribution to those beers, including Corona and Modelo beer. And they needed a company that could buy the distribution rights to those beers that was not a big threat in beer. And there was Constellation that had hardly any market share in beer. And so it got perpetual rights to distribute those beers in the US. And why does that matter? Well, there's a growing Hispanic population in the US, but more important, nobody had really invested to just do the basic things with those beers that everyone does with every beer that they own. Like no one had bothered to put Corona in cans. They weren't really sold on draft. There wasn't a lot of marketing. So they just did basic things to support those brands over the years, and they've become great growers. We talked on some past episode about how Modelo had become the number one beer in America. So anyhow, Constellation was one of the holdout growth stories in alcohol. So even though its stock is not down a lot, it's notable that it's down this much. And that's because even they reported flat volumes. And investors were used to growing volumes. Okay, so the stocks say that alcohol is troubled. Gallup has been polling Americans about their views on drinking for many years. The latest numbers say that something is changing in a hurry for the worse if you're in the business of selling alcohol, and I guess for the better if you're a health official. Here's a question. Do you personally think drinking in moderation, that is 1 or 2 drinks a day, is good for your health, makes no difference, or is bad for your health?

Hope makes no difference, but I have a feeling it's bad.

Well, the percentage of people who said bad for your health, if we go back to 2001, it was 27% that said that's bad. And if we go back not nearly that long, just to 2018, just before the pandemic, it was barely higher than that. 28% said that drinking in moderation is bad for your health. Suddenly the number's up to 45%. Only 8% say that moderate drinking is good for you. We're pretty far from that 60 Minutes episode all those years ago. Each French man, woman, and child consumes a full 40 pounds of cheese each year. Where the numbers get really striking is if you look at young people drinking in moderation, right? 1 or 2 drinks a day. Do you think that that's good for you, bad for you, makes no difference? Remember we said 45% now say that it's bad. But what if we look only at those ages 18 to 34, young people? In other words, 65% say it's bad for your health. One or two drinks a day, bad for your health. 65%. And that number has more than doubled since 2016. There was something profound going on with not just views about alcohol in general, but views among the young. That raises the question of whether we're headed for what Wall Street is calling an age waterfall effect. And that's where older drinkers are replaced by younger, more moderate drinkers draining booze sales overall. And for investors, it means that this class of companies that sold alcohol that were once regarded as consumer staples, companies that sold something that customers would buy in good times and bad, stocks that investors could rely upon. Clearly, these stocks are no longer that. The question now is, how much longer can the declines continue? Or some of these stocks even already good deals? We're going to talk about that in a moment and dig into some of the possible causes of these alcohol declines. And we're going to hear from some people who are on the front lines of serving alcohol and researching what's going on and what comes next. We'll get to that right after this quick break. Data is everywhere. When orchestrated properly, it sings. At Morningstar, we analyze and enrich data, making it actionable and powerful for you. Morningstar, where data speaks. Hi, I'm Kelly Cavanaro, Managing Director, Head of North America Institutional Distribution at Janus Henderson Investors. We believe working together is the way to work better, like combining your portfolio plans and our in-depth strategy, your valued assets and our valuable insights, your mission and our vision, working in harmony to seek the right investment opportunities. Janus Henderson Investors, investing in a brighter future together. Welcome back. Let's drop in on a couple of college bars. I've been involved with this establishment since I moved here in 1996, and Thursday, Fridays, and Saturdays were open till 3:00 AM and we could plan on being packed all the way up until 3:00 AM. Within the last, I would say post-COVID, we have seen that maybe by 1:00, 1:30, the kids all go home. That is Chantel Porter. She's the manager at the Linebacker Lounge. In South Bend, Indiana, home of famously, Jackson? Notre Dame. Right. We wanted to speak with people at a bar at Notre Dame and at Ohio State because there was a college championship game this year in January, right? And it was an expanded format.

It was an expanded playoff.

Playoff format.

Both of these campuses actually got to host a playoff game for the first time. And they both made it to the championship, which means that if you're a bar bar or a pub in the college town, you have lots of opportunities to fill those bars to watch the games too.

You should be doing well, at least during that run-up. These two teams did a lot of winning and we wanted to talk to bars. We didn't want to find the emptiest bar around. We wanted to find bustling bars and just hear some sort of longer-term comparisons. And the Linebacker Lounge, I gather that locals call it the Backer. I haven't had the pleasure of going., but I think it's the kind of place that prides itself in packing the house. An ESPN commentator once called the Backer, quote, a garbage disposal for wobbly humans. That doesn't sound nice. That's terrible. And what the Backer did was they put that phrase on a t-shirt that you can buy for $30.50. That's awesome. So Chantel at the Backer says that they're not staying out as late as they used to. They used to stay till 3. Now they're going home by 1 or 1:30. And that's very similar to what we heard over near Ohio State. They come out and they stay out till about like, like midnight, 1 AM, and then they all go home. And then we're just stuck with an empty bar at the end of the night. That is Nnamdi Onyenwesi, and he is co-manager at— it's— what is it, Jack— Jackson Ratchet and Clank? Snap, Crackle, and Pop?

What's it?

Ethel and Tank. Ethel and Tank. And that's over there at Ohio State. And it's kind of like they described it as right in the heart of the campus. So that's another one. It's a bustling college bar, but Namdi's seeing the same thing. They're not staying out as late as they used to. And I asked Namdi, you know, what are you hearing when you speak to people who go to the bar or they're not going as much? What are you hearing that might give you some ideas about why students aren't going to the bar as much as they used to? And he had a bunch of thoughts. He said that some students might prefer cannabis these days. He said that a lot of them talked about health. He said a lot of them would do some kind of fitness or self-improvement regimen. He was hearing a lot about one called 75 Hard. Jackson, have you heard of that?

75 Hard? No, not, not before this.

I looked it up and, uh, it's something like you got to go 75 days and you gotta exercise a lot and you have to eat healthy and you have to read about self-improvement.

You have to listen to some podcasts.

You have to listen to financial podcasts. Uh, I think drinking water was part of it. I think the 75 comes from you have to do it for 75 days, and the hard, I think, is self-explanatory. It seems pretty hard. So I think that he's finding students that are doing that. But he also mentioned something that I found interesting about social media. Whatever you're doing is at any point is being taped or videoed by somebody. So like a lot of these college students now understand, like, I have something that I'm like looking forward to doing in the future, and if I'm videotaped at a bar doing something that's a little bit less than savory, or a lot less than savory, there goes my future down the toilet. Everyone is pulling out their phones to film everything these days. It's getting so that a college kid can't even drink all night and put on a chicken suit and jump on top of the pool table and sing Ave Maria without everyone wanting to film it. All right. So Jackson, you went out and you spoke with what, some people at the Venice Run Club? What is the Venice Run Club and who did you speak to and what did they have to say?

Yeah, I was acquainted with the Venice Run Club when I was driving on a Saturday morning and I was stopped at a stop sign for 3 or 4 minutes by a horde of 500 people running down the street. And I thought like, oh my gosh, is this a parade or what's going on here? And it turns out it happens every week and they're just like, you know, a couple hundred 25 to say 35-year-olds who go on these long runs together and they stop traffic. I had to check it out. Yeah. I mean, you have— when you have that many people, you have to run in the middle of the road. You can't run on the sidewalk.

You have parks, do you not?

They have parks. I decided that I would put on my running shoes and go to Venice Run Club and asked— better you than me— and asked folks about their drinking habits for the Streetwise podcast. And who'd you hear from? So I heard from Sven Olafsson. He's from Iceland and he goes by Beggy, by the way. And Beggy, Beggy, Beggy. I think he's Beggy.

Beggy. B-E-G-G-Y. You said three. You said Biggie. You said Beggy. You said Baggy.

So he goes, no, no. He introduced himself to me. Me as Beggy, and then I had to get his full name for the article. Here's what he had to say about drinking.

Like all people from Iceland, we drink a lot of alcohol.

And what do you think changed?

For me, just the trade-off of drinking on Friday and Saturday, you will feel it until Thursday or something. And then I was just like, do I really want to do this? And then I was just like, no. Thank you, Sven. Okay, Jackson, did we do a fact check on the point that all people from Iceland drink a lot of alcohol? All people. There are no people in Iceland who do not drink a lot of alcohol. Have we tracked down that fact and verified that?

You know, it might be an exaggeration, but I'd say it was a direction. Okay. Right.

Maybe. And who else did you hear from?

Yeah, I also spoke with Anna Sweeney. She's almost the same age as Sven. She's 31. And she said she used to party hard in her early 20s, but now her whole social life revolves around activities and generally fitness activities. Just listen to the schedule.

Tuesday track, Wednesday mob, Thursday on does a 5K, Saturday long run, and then people do coffee and chill on Sunday. Okay, that sounds like a busy schedule. I like coffee and chill on Sunday.

What is the mob on Wednesday? The mob is what they Venice run clubs like Wednesday night where they run in the dark and there's also maybe like 300 people. On is a different run club and Coffee and Chill is a group that gets together on Sundays and takes ice baths, drinks coffee.

Oh crap, I thought that was for me. I thought that— I'm not sure, the mob or the chill, I'm not sure which is worse. But anyhow, it's nice that Anna has found this fun group and is so active. What about drinking?

What does this mean for drinking? What's interesting is after that Thursday mob, everyone does meet up at a bar.

Wait, wait, wait, wait. Wednesday mob. Thursday is the 5K with us.

Come on. Through the Venice Run Club Wednesday mob, people do meet up at a bar to chat and occasionally people get beers, but it doesn't seem like drinking is the core focus there.

I say more people get the food than they get the alcohol there. Okay. So, Jackson, you heard from a couple of 31, 32-year-olds. We heard from a couple of bar managers about what's going on with the 21-ish-year-olds. I also spoke with Bill Kirk. He's a beverage analyst over at Roth Capital Partners. He says one group is going to make out great right now.

If you're a whiskey consumer, this is a wonderful time to be a whiskey consumer because you're going to find deals on things you never thought you could even see or find or get your hands on. You'll get it at a deal right now. But that's not good from the manufacturer side. It's good from the consumer side.

You know, there is, as I mentioned, a whiskey glut right now. It's tough with whiskey because you age it in barrels. So you have a, a lot of slow-moving inventory, let's call it. So it can take a long time to clear out inventory problems. That's why Brown-Forman stock has been hit harder than the others. There's some other concerns there too. President Trump has talked a lot about tariffs and the story there seems to change week by week. We don't yet know how severe or how widespread those tariffs are going to be or what the retaliation is going to look like. But if you wanted to retaliate against the United States for tariffs, you could hardly pick— and forgive me for saying this, whiskey industry— you could hardly pick an industry that was better suited to what you want to accomplish than the whiskey business. Because American whiskey is obviously made in America. It is made in chiefly red states. It's the pride of Tennessee, the pride of Kentucky.

It's apparently the secret of Kansas too.

It's the secret. It's a secret of Kansas. Yes. Thank you, Jackson. So you could put tariffs on all that whiskey. It's going to hurt exports of it. Some of them might need to substitute for their favorite brands. So that's part of what has added to concern on the part of investors. It's part of why some of these stocks are selling off so hard. Another part is the Surgeon General's warning. Jackson, I mentioned earlier that views on the healthfulness or lack thereof of drinking alcohol among Americans have shifted over the years. Let me read to you this quote: "The three-martini lunch is the epitome of American efficiency." This was said by President Gerald Ford to the National Restaurant Association in 1978. He said, "Where else can you get an earful, a bellyful, and a snootful at the same time. What's a snoot? I guess that's your mouth.

I don't know. I can't believe that.

3-martini lunch. The 3-martini lunch is epitome— that's the President of the United States telling you it doesn't get any better than the 3-martini lunch. We need more of these things. The MADA movement, Making America Drunk Again. 3-martini lunches fell obviously out of favor. Alcohol consumption per capita in the U.S. peaked and started to decline in the early 1980s. Anyhow, research over the years has largely failed. I think it's fair to say to prove the health benefits of, uh, drinking alcohol, but some health officials have grown more vocal about the risks. There was a January advisory from the Surgeon General and it called alcohol consumption a leading preventable cause of cancer. And the report recommended new warning labels on packages and it recommended a revisiting of government guidelines. Currently they say You should have no more than 2 drinks a day for men and 1 drink a day for women. It kind of makes it sound like a guy can have 2 drinks a day and no harm is going to come to him because of that. I think that now they're saying, you know what, we're gathering evidence to suggest that that's not really the case. You should probably not have 2 drinks a day or maybe 1 drink a day. Now you can believe that or not. I don't know. I look, I'm not your doctor or your preacher. You do what you want. I'm still drinking here and there and not as much as I used to, but not because of any real plan to cut down either. I'm looking at this report here. It doesn't seem to provide a whole lot of safe space for just drinking a little bit of alcohol. It's pretty much risky no matter how much you drink. There's a chart that says less than half of Americans are aware that alcohol consumption increases cancer risk. One investment bank called Alliance Global Partners, they published a chart of U.S. per capita cigarette consumption, and they showed how it peaked around when the Surgeon General first warned about tobacco's cancer risks. That was 1964. Of course, then soon after that, there were advertising bans and tobacco tax hikes and lawsuits. I saw one report that cigarette smoking had recently hit an 80-year low in the U.S. It raises the question of whether there's going to be a similar backlash against alcohol, maybe driven by the government. Are we going to see advertising bans? Are we going to see any of these other actions that we saw with tobacco? I asked Bill Kirk at Roth Capital Partners. He doesn't think so. He says alcohol is too much of a job creator.

The Surgeon General's warning, if the labels on the actual products were to change, that is a decision for, uh, that Congress would have to make. Beer and tobacco are very different as it relates to Congress. Beer has a lot of hyper-local congressional district jobs. So it's gonna be hard for Congress to go and change the label on something that's such a big part of their local community.

I asked Bill about what he thinks of the stocks here. Are any of them good deals? He said that he feels better about beer than about wine and spirits right now. He is not bullish on Brown-Forman. He said the beer's a better fit for the moderation movement. He feels like Constellation Brands and Boston Beer have become good deals for investors. Not everyone agrees. Of course, Constellation got downgraded by two big investment banks on the day that it disappointed on volumes. Bill said it still managed to produce some growth in sales and that the quarter wasn't so bad. In general, he thinks that the years ahead for alcohol are going to be ones of declining volumes offset by price increases. For Boston Beer, he likes the growth that the company is seeing from something called Twisted Tea. We will see. Alcohol makers are responding to this downturn in different ways. Some of them have invested in cannabis beverages too. You would think those would be doing better right now, but both Anheuser-Busch and Constellation took losses there. Jackson, we've talked about cannabis beverages in the past, have we not? Yeah, I think so. It's a little complicated. There was a, there was a farm bill in 2018. And part of the deal was they wanted to promote the hemp business. And hemp is like this industrial fiber that you can get, but it has very low THC content almost by definition. And THC is the psychoactive compound in cannabis. In other words, hemp isn't going to get you high, but maybe you can make clothing and other stuff out of it. However, there is a business out there whose very job is to take low concentrations of something that will get you high and turn it into much higher concentrations of that thing that will get you high. And that business is called the distilling business. It is the heart and soul of the spirits business. And if you can turn low alcohol concentrations into high alcohol concentrations through distillation, then you can use hemp with the blessing of the Farm Bill to create a low THC beverage and then distill that into a high THC beverage. Does that make sense? I think I'm not a lawyer, and there's a lot of confusion, there's a lot of murkiness in the industry about exactly what is allowed here. And it's certainly not legal in every state, and states have different laws. But one main observation about what's happening is even in cases where they are selling THC beverages in dispensaries, right, if you're going to a dispensary for cannabis It seems to be not in every case, there are exceptions, but it seems to be if you're headed there for some gummies or some pot, I don't know if you're really going to be talked into walking out with a beverage that you— I mean, what they would have to do for that business to take off is get people who are not dispensary visitors, maybe people who are beer drinkers, and talk them into it. And I think that's harder because like I said, the rules are murky. Anyhow, so the point is, I don't think that cannabis beverages are one of the big reasons that alcohol is falling off right now. But they could be a small contributor. There could be a lot of small contributors. Obesity drugs, right? I mean, with this new class of obesity drugs, as we've talked about, they're very effective. They curb people's cravings for junk food. There are also anecdotal reports, and it's being studied, but they seem to also curb people's cravings for a lot of things that might not be good for them, including alcohol. By the way, I also think inflation might be playing a role. Alcohol prices, both on-premises at bars and at home, they're up a lot over the past 5 years, much more than they increased over the 5 years before. And that's about where things stand. I don't know exactly where it leads. I don't know how much further alcohol consumption will fall in the US. And for that reason, investors could certainly be forgiven for wanting to stay cautious on alcohol shares for a while, at least until volumes or trends stabilize. I'll leave you with one last point for investors. There will be deals eventually in these stocks. In Stocks for the Long Run, Jeremy Siegel pointed out that Philip Morris— it's now called Altria Group— it was the best-performing stock in the S&P 500 from 1925 through 2007. Even since 2007, it has beaten the market. How is that possible in a world where cigarette smoking has been on the decline? Well, those ad restrictions, they keep costs down and high taxes provide plenty of COVID for price hikes. But mostly it's a combination of a chronically low stock valuation, meaning it's cheap to buy in, and a big dividend. Shares there recently traded at 10 times earnings with a 7.7% yield. I'm not saying I'm bullish on Big Tobacco. I'm just saying it has worked out much better than you would think for investors given the circumstances. The bar is not quite that low yet for alcohol. Constellation stock, 13 times earnings. Boston Beer, 22 times. Brown goes for 18 times. Anheuser-Busch, 14 times. Those stocks will be cheap enough at some point. And if the alcohol business survived Prohibition in the US, something tells me it will also survive moderation. I want to thank— oh, we have a list here, Jackson, to get to. I want to thank Bill from Roth Capital Partners. I want to thank Namdi from Ethel and Tank. Chantelle from The Backer with all its wobbly humans. Sounds like they're a little less wobbly these days. And I want to thank Jackson's running buddies from California. They are Jackson.

We have Beggy and Anna at the Venice Run Club.

Were you running during those interviews?

Yeah, I was running when I interviewed Beggy. I was huffing and puffing trying to keep up.

You're a good man working hard for the podcast. Thank you all for listening. You can subscribe to the podcast on Spotify, Apple, wherever you listen. If you listen on Apple, write us a review. If you have a question you'd like answered on the podcast, you could tape it on your phone, use the voice memo. You can email it to jack.hough— that's me, H-O-U-G-H— at barons.com. See you next week. Data is everywhere, but is it ready for consumption? Morningstar developed the language of global investment data so you have the right ingredients to help you shine. Morningstar, where data speaks.