Alcohol Giants Diageo, Pernod Ricard, and Rémy Cointreau Suffer Over $830 Billion Market Value Wipeout Amid Shifting Drinking Habits
Global alcohol producers have seen their market capitalization plummet by over $830 billion in the past four years, signaling a profound shift in drinking habits and rising health concerns. A Bloomberg-tracked index reveals that the share prices of approximately 50 publicly traded beverage companies have fallen 46% from their June 2021 peak.
This downturn is attributed to a confluence of factors, including growing consumer health consciousness, U.S. tariff policies, high interest rates dampening consumer spending, and rising commodity prices. In China, weak household confidence and official prohibitions on alcohol consumption have also pressured demand. Analysts observe that reduced alcohol consumption is now a structural change.
Major European distillers like Diageo, Pernod Ricard, and Rémy Cointreau have seen their stock prices hit at least decade lows. Brown-Forman, the parent company of Jack Daniel's, and Treasury Wine Estates have also been hit hard, while Kweichow Moutai in China has fallen over 40% from its 2021 high.
Changing consumer behavior is a key challenge. U.S. alcohol consumption has dropped to its lowest point since records began in 1939. Health warnings from organizations like the World Health Organization (WHO), coupled with declining appeal of alcohol among Millennials and Gen Z, have intensified this trend. The rise of the sober-curious movement, popular weight-loss drugs like Ozempic, and the emergence of cannabis as an alternative have added further pressure to the alcohol market.
In response, the industry is introducing new products and undergoing corporate restructuring. Carlsberg has launched non-alcoholic ciders, and Campari introduced its non-alcoholic Crodino in the U.S. Diageo acquired Ritual Zero Proof, while Moët Hennessy invested in French non-alcoholic sparkling wine brand French Bloom. Concurrently, the industry has witnessed frequent management changes, with several large alcohol companies appointing new chief executive officers.
Despite the market slump, some value investors see opportunities. The overall alcohol industry index currently trades at roughly 15 times expected earnings, a significant drop from its 2021 valuation. For instance, U.S. hedge fund Cook & Bynum has increased its stake in Brazilian brewer Ambev, believing people will not stop drinking and seeing potential in emerging markets. However, some investors have faced losses; Warren Buffett's Berkshire Hathaway saw its investment in Constellation Brands decline by approximately 40%. Some analysts compare the current industry woes to the tobacco sector, suggesting traditional alcohol producers are being forced to cut costs and focus on more economical options.
2025-11-03
Source: https://www.thedrinksbusiness.com/2025/11/global-alcohol-giants-lose-us830-billion-as-drinking-habits-change/