What Nicotine and Beer Stocks Say About America’s Guilty Pleasures — vinney...axkl

Original source: https://www.wsj.com/business/retail/stock-market-nicotine-beer-vices-3801ef21?mod=hp_lead_pos8

Shared with: ReadToRelay browser extension

Aug. 8, 2025 7:00 am ET

Want to know what guilty pleasures are gaining and losing popularity in America? Take a look at the stock prices of Molson Coors TAP 2.35%increase; green up pointing triangle and Altria MO 0.85%increase; green up pointing triangle.

Marlboro cigarette-maker Altria, which also owns the growing on! nicotine pouch, is up more than 21% so far this year. Shares of Molson Coors, the brewer behind beer brands such as Miller Lite and Blue Moon, are down more than 13%.

Companies that traditionally sold cigarettes are seeing new engines of growth, no tobacco or smoking required. Nicotine pouches like on! and British American Tobacco’s BATS 0.93%increase; green up pointing triangle Velo look like tiny tea bags that sit between the gum and the cheek and are often filled with wood pulp along with nicotine salts and flavorings. The nicotine is absorbed into the bloodstream through the mouth’s lining.

Zyn, which is produced by Swedish Match North America, an affiliate of Philip Morris International PM 1.07%increase; green up pointing triangle, is the most popular nicotine pouch. It gained popularity due in part to a devoted following of unaffiliated “Zynfluencers” who tout their love of the brand.

Earlier this year, U.S. health officials authorized Zyn to stay on the market after finding that it has benefits as an alternative for adult smokers that outweigh its potential risk to young people.

While it is well known that cigarettes cause cancer and fewer Americans are smoking, many have experienced a rude awakening in the past year or so about the cancer risks that alcohol can pose.

New warnings about booze’s adverse affects on health have helped fuel the sober-curious movement, and a new report shows just how many people are trying to cut back.

Recent research found that 56% of U.S. adults polled said they had reduced alcohol consumption for wellness or lifestyle reasons, often opting to try new flavor profiles or gut-health drinks instead, according to surveys of thousands of U.S. adults conducted by Harris Poll, Ipsos and Morning Consult on behalf of Keurig Dr Pepper KDP 1.14%increase; green up pointing triangle.

Gallup, which has tracked U.S. drinking trends for three decades, found in its latest survey that a record-low number of people claimed beer as their alcoholic beverage of choice. In beer’s heyday, in the early 1990s, 47% said a bottle of suds was their drink of choice. Now, at 34%, beer’s popularity is on par with wine.

This year beer demand has dropped much more than expected, Gavin Hattersley, chief executive of Molson Coors, told investors and analysts this week. Uncertainty around immigration and trade policies have weighed on prices—and consumers.

“These macro impacts in the U.S. have had a disproportionate effect on lower-income and Hispanic consumers,” he said, adding that these shoppers were dialing down how much they spent on beer, at times forgoing purchases entirely. Beer is more popular with people in households that bring in less than $100,000 a year and with noncollege graduates, according to Gallup.

Tariffs on aluminum, which adds to the cost of every can, are also pressuring beer companies. Molson Coors now expects adjusted earnings to fall as much as 10% for the full year, compared with previous expectations of low single-digit growth.

Meanwhile, the share price of Anheuser-Busch InBev ABI 1.11%increase; green up pointing triangle, which sells the Corona and Stella Artois brands, is up nearly 23% so far this year, even though its beer sales have fallen for nine consecutive quarters.

While discussing earnings last week AB InBev Chief Executive Michel Doukeris kicked off the call with a list of top highlights that included this one: Nonalcoholic-beer revenue shot up by 33%.

Beer sales are falling so fast, it is “actually turning into the combustible section of the alcohol category,” said Bonnie Herzog, a senior consumer analyst at Goldman Sachs, likening beer’s waning popularity problem to cigarettes.

“I am hard-pressed to find a tailwind for the beer category. Nicotine, on the other hand, is in this period of time where we have a resurgence given some of the innovation,” she said. “Consumers are gravitating to the smoke-free alternatives. Nicotine pouches. Everything but cigarettes.”

Some cigarette makers are experimenting with cheaper smokes to try to appeal to consumers who feel strapped.

British American Tobacco, which makes Newports and Camels, is testing a more affordable cigarette to reach price-sensitive smokers. And Altria recently used its trove of consumer data to position its Basic brand front and center in about 30,000 stores across the country—ones where shoppers were seeking value. Basic is priced below Marlboros—a premium brand that is the most popular in the U.S. Basic sales rose with limited impact on Marlboro, Altria said.

Write to Laura Cooper at laura.cooper@wsj.com