The beer industry is considered an excellent industry to be in during a recession.
In fact, this current recession has shown just that.
Many of the premium brands may not be selling as well as they once did, but they certainly haven't taken the hit as hard as other industries.
Meanwhile the discount beer brands are screaming along and doing quite well.
Now we see the beer industry doing a little consolidation, and everyone is wondering if this will increase profits for the industry, or strap some companies with a huge amount of debt, actually lowering their stock price.
Generally whenever there is a rumor of mass consolidation in an industry, stock prices start to go up a little bit, especially if the industry is doing okay with quarterly profits.
That's exactly what we have right now, that is the scenario.
The reality is the beer industry spends a lot of money on distribution of their products, and tons of money for marketing, anytime they can consolidate those types of costs, they stand to make more money.
And this is what they are looking into right now.
Does this mean a small time investor can make money on the stock of one of the companies that is getting into the consolidation? Well, it appears that they all are talking about consolidating, and they have the merger and acquisition teams working on plans.
Chances are if you are not already in a beer stock, you may have missed the boat, because there seems to be a feeding frenzy around that boat, as if someone dumped over a bunch of live bait, to a swarm of hungry sharks.
Now the question is; will the consolidation in the beer industry work? Will the cost of the acquisitions factor out to a good return on investment for those companies doing the buying? After studying the industry for quite some time, it appears so.
There are some economies of scale and still ripe for the picking.
Please consider all this.