Insider Monkey

11 Best Wine Stocks to Buy Now

Usman Kabir
8 min read

In This Article:

In this article we discuss the 11 best wine stocks to buy now. If you want to skip our detailed analysis of these companies, go directly to 5 Best Wine Stocks to Buy Now.

Broad economic trends such as population growth, the increase in disposable incomes, and cultural changes in Asia are all expected to have a significant impact on the production and consumption of wine across the world in the coming years. Even though the US remains the biggest wine market in the world in terms of value - worth over $66 billion in 2022 per Research and Markets - other countries, like France and China, are beginning to increase wine consumption and catch up to the North American market. 

The per capita consumption of wine remains significantly higher in Europe as compared to other parts of the world. In countries like France, Portugal, and Italy, it is around 35 liters per person annually. To put this figure into context, the per capita consumption of wine in the US, the largest wine market in the world, is only around 9.9 liters per person per year. The consumption of wine is on the rise in places like China and Australia. Europe is the largest consumer of the alcoholic beverage in terms of volume and value. 

Germany, the US, and the United Kingdom have over the past few years emerged as the largest importers of wine as the production of wine in these places is much lower than the consumption. The US wine market is expected to reach more than $111 billion in value by the end of this decade. Some of the top stocks to monitor in the wine industry in the country include Constellation Brands, Inc. (NYSE:STZ), Diageo plc (NYSE:DEO), and The Duckhorn Portfolio, Inc. (NYSE:NAPA), among others discussed in detail below. 

A closer look at the future growth plans of these companies provides further insight into the wine universe. Deirdre Mahlan, the CEO of The Duckhorn Portfolio, Inc. (NYSE:NAPA), recently said during the first fiscal quarter earnings that her company was focused on leveraging brand strength, evolving the portfolio, expanding the wholesale network, and growing the DTC channel to maintain a track record of profitable sales growth even as the macro environment in the wine market remained uncertain at best. 

“We're actively adjusting our DTC approach to respond to changing consumer behavior and tap into the strength at the ultra-high end, and we're seeing some positive results. For example, although a number of visitors and spend per visitor were soft in the quarter, we've seen a strong response to our elevated tasting experiences where spend per person can be considerably higher than our traditional tasting program. From a total volume perspective, Q1 declined 3.4% in line with expectations. Shipments to wholesale declined 3% in the quarter while depletions declined at a slower rate. Wholesale inventories remained at a healthy level and in line with our expectations. While days on hand ticked higher year over year, this was primarily driven by lower than ideal levels during the peak selling season last year. Drilling down within our portfolio, we see performance slightly ahead of the industry overall with some areas of particular strength, including Decoy Limited, which had great success expanding into Merlot.

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