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How to profitably swallow the defeat of Polish footballers?
Poland has dropped out of Euro 2020, but the others are still playing. Beer is also poured, which some people drink for joy, and others to sweeten their defeat. Investors are just waiting for it, because during big football tournaments the shares of breweries and beverage producers grow more than the entire market.
About the author
Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.
Brewing industry - how much is it worth?
The group stage of Euro 2020 has come to an end and there are 24 left from the 16 teams starting the tournament. Poles also dropped out, although in the last two matches they showed character and bravery. The Scots, Russians, Hungarians, Finns and four other teams also dropped out. The representatives of these nations were left to cheer on others and drown their sorrows in a glass of cold beer. And whether you've supported the winners or the losers, the beer industry can be good business for investors. During the most important football tournaments in the last decade - from Euro 2012 to the 2018 World Cup, listed global breweries and producers of non-alcoholic beverages consistently outperformed global equities - an average increase of 2,9% according to our analysis. compared to global equities which were up 0,9 percent.
It's worth noting that our brewing industry is doing much better than our soccer team. While we are 21st in the FIFA ranking, we are the 10th largest beer producer in the world. And when it comes to its consumption per capita, we even jump to the 5th position. In 2019, i.e. before the pandemic, which influenced the increased consumption of beer, the average Pole drank 97,9 liters of it annually. Czechs (188,6 liters) drink the most per capita, followed by Austrians (107,8), Romanians (100,3) and Germans (99). With the exception of the Romanians who did not qualify, all of these countries are still in the tournament. Just like Spaniards, Croats, English and Dutch who consume a lot of beer.
Although Europeans break records in the consumption of beer per capita, the most of it is produced and drunk in Asia. The largest beer producers in 2020 were China (376,5 million hectoliters), the USA (210,9) and Brazil (144,8). Only in 5th place is the largest producer in Europe - Germany, producing 91,6 million hectoliters. Poland is the 10th with an annual production of 39,3 million hectoliters. Europe remains the second largest region in the world in terms of production, the countries of South and Central America are third and North America fourth.
Beer companies
Due to the position of Europe in this ranking and the popularity of football, it can be said that EURO is a real beer celebration. One of the main sponsors of the tournament is Heineken, which constantly reminds football fans about its products. At the same time, manufacturers are trying to expand their product offer. In many markets, during the championship, non-alcoholic beer is massively advertised, as well as various types of beer drinks, which is to enable them to reach consumers who do not like traditional types of beer. In many markets, beer is under pressure from competition: wine, spirits and even marijuana, where its use has been legalized.
The global beer market is highly concentrated with a significant share of a few large global players. The largest is the Belgian giant listed on Euronext Anheuser-Busch InBev. AB InBev owns over 400 beer brands, including global brands Budweiser, Corona i Stella Artois. In 2016, the concern acquired another large producer - the company SABMillerbut at the same time sold its European assets, including the Polish Kompania Piwowarska. Therefore, it does not currently have any breweries in Poland, its products are available on our market, but their share is small. The company recorded very good results for the first quarter of 2021 - global beer sales were up 14,9 percent. higher than in the first quarter of 2020. In the same period, the segment of beverages other than beer increased by 4%.
The second largest beer producer in the world and the largest in Europe is already mentioned Heineken. The concern is the majority shareholder of the company operating on the Polish market Żywiec Group. It produces in Poland e.g.. brand Zywiec, Heineken, Warka, Tatras i Royal. It is the second largest beer seller in Poland after Kompania Piwowarska (owned by Asahi Breweries z Japan). Heineken Holding NV, listed on Euronext, saw overall beer sales drop 2,5 percent in the first quarter. Compared to the same period in 2020, the Heineken brand itself recorded a significant increase, whose sales increased by 12,1 percent. The company is currently aggressively promoting the global brand of Heineken 0.0 non-alcoholic beer.
The largest beer producer in Poland is Kompania Piwowarska, the owner e.g.. brands Tyskie, Wisent i Lech. It belongs to the Japanese Asahi Groupwhich is listed on the Tokyo Stock Exchange. The remaining part of the Polish beer market belongs to Carlsberg Polska, a subsidiary of the Danish concern and medium and small regional breweries.
The championship will last until July 11, which means that fans will drink a lot of beer by then. This should result in high sales of their producers. If we want to invest in industries, we can do it by buying stocks of companies such as Heineken or AB InBev. However, when diversifying our portfolio, it is worth considering a wider exposure not only to the beer market, but also other alcoholic beverages, for example by investing in a company Constellation Brands. Geographical diversification can be provided by companies such as, for example, Brazil ambrew. If we are interested in innovation in the beverage market, we may be interested in stocks Boston Beer, a company in Canada develops cannabis-based beverages. We can also be exposed to the market by ETFs, e.g. Consumer Staples Select Sector SPDRwhich invests heavily in companies that produce basic consumer goods. We can also invest in ETF on indices, e.g. Xtrackers Nikkei 225 UCITSthat maps Nikkei 225which includes the Asahi Group. We may finally be interested in the thematic portfolio eToro FoodDrinkwhich includes global companies producing food and beverages.
