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Want to binge on the booze boom? Invest in liquor funds, farms

Want to cash in on the liquor boom?

Savvy and well-educated investors may consider looking beyond individual liquor brands and companies to creative exchange-traded funds and their agricultural suppliers.

"We believe we're at year five of a 25- to 40-year super-cycle that could see continued growth in consumer demand for whiskey and spirits, much like what has occurred with craft breweries over the past two decades," said David Bolton, president and CEO of Spirited Funds, in a press release citing overall beverage alcohol industry sales of more than $1 trillion per year.

Bolton's company, along with ETF Managers Group, debuted the Spirited Funds/ETFMG Whiskey and Spirits ETF to help investors capitalize on the craze in October. Made up of a small number of companies that derive part of their revenue from the spirits industry, it allows investors to own a diversified piece of brands, such as Pernod Ricard, Diageo and Brown Forman, as well as some foreign companies.

The big guys aren't the only ones experiencing record sales: There are now 750 micro-distilleries in the United States, compared to 92 in 2010.

To make their hooch, all of these producers need raw agricultural products, such as corn, wheat, barley and rye, and their "commodity-linked nature" helps investors interested in liquor mitigate down markets, Bolton said.

That leaves profit-thirsty investors with a growth opportunity, but not without careful consideration and a creative strategy.

The cumulative amount of crops used in distilled spirits production shot way up compared to the same period last year, according to the Department of the...


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