Eternal growth: how to invest in the future of the drinks industry

Humans have been dabbling in tasty beverages for millennia. Jonathan Compton assesses the key trends in the sector and recommends seven hard- and soft-drink stocks to buy now.

young people drinking something
Asia, with nearly two-thirds of the world’s population, still consumes relatively little alcohol
(Image credit: © Getty Images/iStockphoto)

I am not inclined to disclose to my doctor my slightly alarming consumption numbers. Over the last half century, my beverage intake has included around 4,000 gallons of coffee and tea, 2,000 gallons of wine, slightly less of other fermented drinks and a rather feeble 20 gallons of various spirits. Although the expense has exceeded the value of my home, I comfort myself that the total liquid equivalent is a mere 1.1% of the volume of an Olympic-sized swimming pool. As an investor I also have various drink interests: in my share portfolio; as a partner in a wine-investment group; as the owner of two pub/restaurants; and as an occasional grower of malting barley.

Leaving aside my personal habits I am a big fan of investing in the beverage industry for three reasons: it is largely unaffected by the economic cycle; it offers steady growth; and valuations are reasonable. Moreover, we are clearly in a global stockmarket bubble (see page 5). Whether the inevitable pop is next week or next year, these companies will not only survive but continue to grow.

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Jonathan Compton was MD at Bedlam Asset Management and has spent 30 years in fund management, stockbroking and corporate finance.