This industry titan traces its roots back to 1759, and has since amassed an iconic portfolio of world-leading brands. A nearly 50% decline in its stock price due to temporary factors has provided a rare opportunity to buy this recession-resistant gem at its cheapest valuation in over a decade.
Centuries of Brand Power Drives This Industry Leader
Massive Scale Creates the Ultimate Competitive Advantage
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Few things are scarier than a drunk Irishman brandishing a pickaxe.
And – horrors – using “very much improper language.”
It wasn’t surprising that the Dublin sheriff and his men backed down when Arthur, a brewer, came out swinging… and yelling the profane, 1770s version of “Get off my lawn.”
But the officials’ retreat from Arthur’s property was only temporary. The sheriff planned to keep coming back until he got what he wanted: Arthur’s river.
When Arthur had leased the modest, four-acre site for his new brewery business in 1759, he’d been delighted to discover that the land came with its own source of fresh, running water – perfect for high-quality stout.
And he quite naturally assumed the water rights were part of his original lease. But the Dublin government had other ideas.
Toward the end of the 18th century, the archaic and corrupt city administration, the Dublin Corporation, had started to collapse under the weight of heavy city debts and bad decisions. To drum up extra cash, it decided to take control of the water supply – mandating that Dublin citizens use (and pay for) piped-in “city water.”
If, like Arthur, you had your own, non-city-controlled water source, you could expect a visit from the Corporation, which would divert your stream into city pipes, whether you liked it or not. (Ironically, the motto on Dublin’s coat of arms was – and still is – “The Obedience of the citizens produces a happy city.”)
Arthur was not happy with the Corporation’s intrusion. Hence the pickaxe.
Hence, also, his ensuing legal battle against the Dublin Corporation… a struggle that dragged on for nine years.
In the end, likely out of sheer exhaustion, both parties gave in… a little. Arthur grudgingly consented to pay for his own water, but under very specific terms: He agreed to take out an additional lease on the property – £10 per year, just for the water.
The length of the lease? 8,795 years.
In effect, the obstinate brewer was saying, “I and my 10 children, and their descendants, and their descendants will be here, on this four-acre property, long after the Dublin Corporation is a footnote in Irish history.”
Over the next two centuries, the Corporation was razed, restructured, renamed, and reformed.
But nothing changed for Arthur’s children, and grandchildren, and great-grandchildren. They stayed right where they were, paying their rent-controlled £10 per year, and using their own water to make superb beer. Even more remarkable, until the land contract was renegotiated in the 1980s, the original lease agreements stayed in place.
Today, you can still drink that beer… and invest in it, too.
Appropriately, it’s now a cornerstone of a true “forever company”… shares of which this month we recommend buying, and holding (and passing on to your own descendants) for at least 8,795 years.
A Business Built on Brand Power
In the business of booze, brand power is destiny. Once consumers establish their favorite beer, wine, or spirit, they tend to stick to it for life. As new generations come of age, they mimic the favorites of their elders. As a brand becomes ingrained through generations of tradition, it becomes virtually impossible for competitors to displace them (that is, unless they hire a woke brand manager and self-destruct, as Anheuser-Busch recently showcased with the spectacular implosion of the Bud Light brand).
That’s why many of today’s biggest alcohol brands – across beer, wine, and spirits (liquors) – have been around for many decades, if not centuries. This includes the world’s most valuable beer brand Heineken (established 1873), leading wine and Champagne maker Moët & Chandon (established 1743), and best-selling spirits like Smirnoff in vodka (established 1864) and Hennessy in cognac (established 1765).
This brand loyalty makes the business models of the top alcohol producers remarkably resilient, giving rise to the ultimate “forever stocks.”
The company we’re introducing today traces its roots back to 1759. Since then, the business has amassed an industry-leading portfolio including some of the most iconic and enduring alcohol brands. As people around the world gather for the upcoming holidays, many will be consuming its products, just as previous generations have done.
Beyond brand power, this company also enjoys a strong competitive advantage through its unmatched economies of scale. This allows it to acquire small brands and turn them into global giants. The business is highly capital efficient and recession-resistant, generating positive sales and earnings growth – even in down cycles, such as during the Great Financial Crisis from 2007 through 2009.
Normally, this company’s premium business model commands a premium valuation. But temporary macro factors have caused a nearly 50% decline in the company’s stock price. This has created a rare opportunity to buy shares at their cheapest valuation in over a decade.
A Forever Stock Goes on Sale
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