The economic downturn has hurt a lot of industries, some manage to squeak by with profitability. Who profits when bankers, finance managers, CEO’s and car manufacturers are reporting nothing but bad news? Whiskey maker Brown-Forman, maker of Jack Daniels, Southern Comfort, Early Times Kentucky Whiskey, Korbel Champagne, bourbons, vodkas and wines has posted positive numbers.
Chief Executive Paul Varga credited the strong performance to “the stability of our company, the strength and resiliency of our brands and people, and the quality of our cash flows and balance sheet.” That could work. Or maybe it’s the fact that millions of newly jobless, formerly productive members of society are now spending their days in rocking chairs, drinking whiskey and cursing at their TVs. (asylum.com)
When economic depressions occur, people reach for the hard stuff to cope with life. The Great Depression was followed by an anti-Prohibition movement which sparked life into the falling economy; are we seeing historic events echoed again in 2008?
Along with entertainment in video games and movies, people rely on a little relaxation to get through some of the tougher days. We’re looking at hard economic times for a few years, no doubt beverages producers will be posting some big numbers doing the slump. Brown-Forman posted a 13% increase in profits in the second quarter and we’re expecting a few more companies to provide more good news.
Top shelf liquors may not be the choice product for the unemployed, but Anheuser-Busch, Molson Coors Brewing Company and many other mass market brewers should see an influx in sales figures. Alcohol has been the remedy for wars and down economic times, this trend will probably stick around as well.
High school graduates may decide to head to college instead of jumping into a downed economy which, in turn, will bring in more college parties and reasons to buy alcohol.
Now, if those college students could only find some financing.