Alcohol is one of the more recession-proof investments that you can make, and these days, the market has gone upscale.
As middle classes worldwide developed, they moved upmarket with alcohol, says Brian Sterz of Miracle Mile Advisors. “That’s been where a lot of growth in distillers and distributors has come from.”
However, as consumers seek quality, behind the scenes, large breweries and spirit-makers buy higher quality microbreweries and craft distilleries, experts say, which can lead to investment opportunities.
Sterz likes Constellation Brands (NYSE: STZ; Price: $149.97) because of its combination of upscale and mainstream brands that appeal to different demographics. Diageo (NYSE: DEO [ADR]; Price: $112.14) is another good pick for similar reasons, and Sterz calls it undervalued.
Constellation and Diageo have a mean analyst recommendation of “buy” or better, according to Zacks Investment Research.