I am not going to lie: it has been hard to find inspiration in this booze (and booze M&A) down cycle. Everyone is a seller and the usual buyers are on strike — the lower echelons of upper management refuse to answer my emails (I think daily whether that silence is cyclical or structural…).

But I am back in your inboxes, baby! Nothing like successful heart surgery and an announced deal. 

Alcohol's Big Tobacco's Moment

If only we were so lucky. A 10 year share price comparison of the DJI index vs Phillip Morris, Altria, Diageo, BF/B shows the enormous outperformance (100%+) of tobacco, before TSR is considered (I chose the .DJI to adjust for the the .S&P's recent reliance on tech). If this is the structural decline of alcohol, some historical perspective is useful.

In time the resulting existential conversations might become more nuanced in their comparison of tobacco and what slower growth (or even managed decline) really means for booze. Management of the share register and overall narrative will be key: at present the collective, historic MSD guidance is still acting as an anchor and, consequently, a source of endless disappointment. 

Venturing

Last year marked the 10th anniversary of the 'world's first drinks accelerator' (the founding of which was one of my early projects). Less than 12 months later, <$500M is written down. 

They tried and it didn’t work. Fair enough. The real lesson ought to be cultural. Surely, half-way through the third $100M being invested it would have been obvious whether the programme served the interests of shareholders or was mostly useful for IR and resumes. Turns out the pursuit of alignment can have a tangible cost.  

Don't Mimic This

Does anyone know how my favourite non-alc brand is doing? It seems to have fallen off my radar after it hit distribution in all 195 UN-recognised countries. I exaggerate, but only slightly. The unending stream of new variants seems to have ceased. An investment deck is asking for 8 digits but obfuscates even basic information such as 9L shipments and TTM NSV: that probably says it all.