Respecting the Value and Freedom of All People: Our Approach to Alcohol Investments

Shaun Morgan
4 min read

Investors have a tremendous opportunity.

They have an opportunity to make a difference in the world by allocating capital towards companies that create value for society.

As investors consider the types of companies they want to invest in, they can imagine themselves as owners of the companies and understand the impact of these companies on their various stakeholders—customers, employees, suppliers, host communities, the environment, and broader society.

It is this understanding that can inspire them to seize the opportunity to invest in companies that are profitable because they add value to rather than extract value from their stakeholders.

This is what inspires us at Eventide—the opportunity to invest in companies that flourish as a result of helping others flourish.

So, how does this impact the way we approach investing in companies that produce, distribute, and market alcohol?

We explain our approach in this way (which can also be found in our Guide to Screening):

As Eventide respects the value and freedom of all people, including freedom from addictive behaviors, we seek to avoid exposure to alcohol. While we believe alcohol can be responsibly enjoyed in moderation, we take a more conservative approach to screening given our lack of visibility into end consumption.

Troubling Signs

Numerous recent studies have shown a drastic increase in alcohol sales during the pandemic and a mirrored increase in physical and mental health problems, such as anxiety or depression. It is difficult to ignore the correlation between the simultaneous increase in these troubling societal problems and the financial success of alcohol companies.

Studies that took place in the years preceding the pandemic also highlighted the concerns over the increased amount of alcohol each individual was consuming. One such study projected that by 2030, 23% of adults around the world will "binge drink"—defined as "an intake of 60 grams of pure alcohol or more at a single sitting"—at least once a month.

The CDC estimates that 95,000 people die each year from alcohol related causes, making it the third leading cause of preventable deaths in the U.S., trailing only tobacco use and a poor diet combined with a lack of exercise.1

A Well-known Investment Strategy

It is a well-known investment strategy to intentionally invest in industries like the alcohol industry that rely heavily on an unhealthy dependence from its customers, especially during times of crisis.

This strategy seems to be a clear indication that success within an industry can often come at the expense of the well-being of many of its customers.

A Different Investment Strategy

On the other hand, the values-driven investor considers another well-known investment strategy—"Is there a more desirable use of capital elsewhere?" In other words, are there companies who are succeeding by adding tangible value for their customers by meeting important human needs?

Investors have the opportunity to allocate capital towards these companies and join in their success, which, in our estimation, is a more desirable use of capital—one that respects the value and freedom of all people.


Note

1. A.H. Mokdad, J.S. Marks, D.F. Stroup, J.L. Gerberding, et al., “Actual Causes of Death in the United States, 2000,” Journal of the American Medical Association (JAMA) 291, no. 10 (March 10, 2004):1238–45.

*Photo by Pablo Heimplatz on Unsplash


This communication is provided for informational purposes only and expresses views of Eventide Asset Management, LLC ("Eventide"), an investment adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide's values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to Eventide’s Business 360 approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Eventide’s overall research process. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.

Before investing or sending money, an investor should carefully review investment objectives, risks, charges and expenses as provided in prospectuses and other information available at www.eventidefunds.com or by calling 1-877-771-EVEN (3836). Eventide Asset Management, LLC serves as investment adviser to the Eventide mutual funds distributed through Northern Lights Distributors, LLC (“NLD”), member FINRA/SIPC. NLD and Eventide are not affiliated entities.

4384-NLD-2/24/2021

Posted February 25, 2021
Shaun Morgan
Shaun Morgan

Shaun Morgan manages Investment Marketing for Eventide. He is responsible for developing strategy and supporting content creation for investment marketing at Eventide.