How to Profit as Big Beer Takes on Craft Brewers

This post How to Profit as Big Beer Takes on Craft Brewers appeared first on Daily Reckoning.

Don’t go crying about the stock market into your pumpkin infused ale.

It doesn’t want to hear it. That’s because the craft beer industry is taking hit after hit these days. Your beer wants to cry in someone else’s beer!

Sure, fancy suds from your local brewpub are more popular than ever. But on the investing front, the big boy brewers are generating the real profits for investors.

And today you have a chance to gulp down double-digit gains as the enormous beer business unveils a major development…

Here’s the big story today:

Anheuser-Busch InBev is preparing to make a bid to takeover SABMiller. That’s the biggest brewer on the planet scooping up another giant. As CNNMoney reports, combining these brewers would create a $276 million company with annual sales of $55 billion. That’s a hell of a lot more dough (or maybe hops) than your favorite apricot beer is bringing in.

The big brewers are getting heady on the takeover talk. Check it out…

Big Beer Gets Frothy...

Look, I warned you earlier this year that the beer market might be getting a little too frothy these days. Too many craft beers – yet not enough craft beer drinkers to keep everyone rolling in profits. Don’t get me wrong, I think the bigger craft brewers will be great takeover targets for the Millers and InBevs of the world…

But the craft beer biz is overstretched. There are just way too many craft breweries popping up all over the place. It’s unsustainable. The number of craft breweries has more than doubled over the past six years, according to Fortune. And by the end of this year there’ll be a new craft brewery opening in the U.S. every 12 hours.

And yes, that also means folks aren’t guzzling Budweiser like they used to back in the day. And that’s exactly why the big dogs are putting their money to work buying up the craft beer companies looking to cash out…

“Companies that, combined, make nearly a quarter of the world’s beer just got up off the bench and started buying craft breweries,” Jason Notte explains in his MarketWatch column. “Heineken just bought its first U.S. property, while MillerCoors — which hasn’t made a purchase since buying Crispin Cider in 2012 — has acquired its first craft brewer since picking up Leinenkugel in 1988. That’s a lot of buying power going into a quickly consolidating market, and it may be just the beginning.”

The big dogs will continue to jostle for position and fight for new acquisitions in the craft brewing space…

I’ll lift a cold one to that.


Greg Guenthner
for The Daily Reckoning

P.S. If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, right here. Stop missing out. Click here now to sign up for FREE.

The post How to Profit as Big Beer Takes on Craft Brewers appeared first on Daily Reckoning.