Alcohol consumption remains under pressure, with 2024/25 period sales falling nearly 2% Y/Y to $25.8B - despite an equivalent rise in price.

The main driver is per person consumption, which fell nearly 10% to eight drinks per week - with declines in all categories except for ciders and coolers…

… making the growth outlook challenging. There could be organic levers within categories though, wine in particular - which saw its first decline in imported sales on record. With every 1% increase in domestic share representing ~$75M…

… industry players like Andrew Peller (ADW) would be well-positioned if that shift were to continue, given its scale (2nd largest in Canada) and improved cost structure.

Beyond that, industry conditions could drive consolidation - which management appears to have prepared the balance sheet for…

… if the right opportunity comes up. If they can execute against a tough backdrop, there could be room for multiple expansion…

… with shares trading well below the long-term average valuation.

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