Beverages covers soft drinks, energy drinks, beer, wine and spirits, along with the bottlers that make and distribute them. MoatScope covers 36 companies here. Seven have a wide moat, 13 a narrow moat and 16 none.
How the industry makes money
The industry splits into brand owners and the businesses that produce and distribute their drinks. Coca-Cola operates mainly as a concentrate maker and brand marketer, while bottlers such as Coca-Cola Europacific Partners, Coca-Cola FEMSA and Coca-Cola Consolidated manufacture and deliver the finished drinks. PepsiCo pairs its beverages with a large snacks business. Brewers such as AB InBev and Ambev run high-fixed-cost production and distribution networks, and spirits makers such as Diageo and Brown-Forman build brands that command premium prices.
Where the moats are
Brands, counted as intangible assets, appear in 17 of the 20 moat-rated companies. Cost advantages appear in nine and efficient scale in seven, because production and distribution reward the largest operator in each market.
- Coca-Cola and PepsiCo: global brand portfolios backed by distribution systems few rivals can match.
- AB InBev and Ambev: scale advantages in brewing, purchasing and distribution, with Ambev the dominant brewer in its core markets.
- Diageo and Brown-Forman: portfolios of leading spirits brands, including Johnnie Walker, Smirnoff and Don Julio at Diageo.
- FEMSA: the density of its OXXO convenience-store network in Mexico, which no competitor approaches.
The narrow-moat group includes Monster Beverage, Keurig Dr Pepper, Constellation Brands, Molson Coors, Celsius and several Coca-Cola bottlers. Companies without a moat are mostly smaller wine and spirits producers.
What wears moats down
Tastes change: consumers drink less alcohol in some markets and shift toward healthier or more functional drinks, and new brands can win shelf space quickly, as energy drinks have shown. Input costs such as packaging and sweeteners squeeze margins, and large retailers push back on price increases.
What the quality scores say
The wide-moat companies score between 57 and 71 on MoatScope's quality scale, against an industry average of 44. Monster, rated narrow, scores 75, higher than any of them, another reminder that moat and quality measure different things.
What to watch
- Volume growth versus price increases.
- Alcohol consumption trends, especially among younger drinkers.
- Competition in energy and functional drinks.
- Input costs and currency effects on international sales.
Moat ratings and quality scores on this page update as companies report. Price versus fair value for every company in the industry is in the screener.