The Business of Booze

My name is Tom and I am the CEO here at KegWorks. When people find out that I work in a business related to alcohol they always want to talk about what they like to drink (right after I tell them I can’t get them free beer) or what’s new in the industry. One thing that people rarely know is that their favorite wine, spirit or beer is part of a large corporation that owns many different brands. Did you know the same company that owns Jim Beam also owns Sauza Tequila, “Smooth as Silk” Kessler Whiskey, VOX Vodka, and the Geyser Peak Winery? This same corporation also makes Titleist golf balls, Footjoy golf shoes and Moen faucets.

Over the next couple months I will blog about a different company and the many different brands that they own. For the first few months I will talk about the publicly traded companies. If you’re dying to know the company I was talking about before, look up ticker symbol FO. These posts do not constitute financial advice and seek the counsel of your own personal advisors before making any investments blah blah blah (the lawyers made me put that in).

Diageo PLC (DEO) is the subject of this month’s post. Diageo is headquartered in London, England and trades on the New York Stock Exchange and the London Stock Exchange (DLG). With overall sales in 2006 of over 19 Billion dollars DEO is a one of the largest companies in the alcoholic beverage market. DEO has over 20,000 employees and operates in 180 different markets. DEO works with a two tiered strategy with a focus on 8 global brands and then brands focused on the local market. The global brands are Smirnoff, Johnnie Walker, Guinness, Captain Morgan, Baileys, Jose Cuervo, Tanqueray, J&B. Examples of local priority brands for North America include Crown Royal Canadian whiskey (a shot favorite here in Buffalo), Seagram’s 7 Crown, and Beaulieu Vineyard, Sterling Vineyards and Chalone Vineyards. Now I prefer to drink Guinness or a single malt scotch, while my wife enjoys red wine. One of her favorites is the Echelon Pinot Noir that is produced by the Chalone Vineyards. We met while we both were working for a wine marketing company, so I trust her judgment.

As of Thursday, DEO was trading at $84.87 and is closing in on its 52 week high of $86.95. I’m not sure if DEO fits your investing tastes but I’m sure you can find something from its portfolio of brands to enjoy this weekend.

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