Molson Coors shows macro beer is on the up

Molson Coors continues to smash expectations. Jessica Mason looks at its how its strategic moves have contributed to its recent ascendency. 

Speaking during the company’s fourth quarter earnings call this week, Molson Coors CEO Gavin Hattersley said: “At the start of last year, no one, absolutely, nobody could have predicted what would happen in the beer industry. Since then, we increased our expectations for the full year, not once but twice. In 2023, our global net revenue grew more than 9%, and we grew our bottom line by nearly 37%. These are our highest reported dollar results on record ever, on top of the already impressive results in 2022.”

Hattersley pointed out that, despite the headwinds, Molson Coors has managed to deliver profit growth that it had not expected to achieve until 2028. Hattersley revealed: “Every year, for the past three years, our industry has faced challenges. We’ve gotten good at managing them, even when they’re massive enough to permanently alter the beer industry. And every year for the past three years, we have navigated successfully through the challenges. We have delivered against our vision, and we have grown. But growth is not a strong enough word to describe what we achieved in 2023. We’ve set a new baseline for our business, and you don’t need to look any further than our bottom line. In fact, our 2023 underlying pre-tax income was higher than we thought it would be, and frankly, higher than anyone I am aware of said it would be in 2028. So, Molson Coors delivered six years of profit growth, six years of growth in just one year. That focus is a new baseline. We are ready for this moment”.

To illustrate the size of the achievement, Hattersley explained: “In 2023, our top five brands around the world drove over two million more hectolitres than they did the prior year. This is like adding the entirety of Blue Moon’s global volume to our portfolio.”

Looking at America, Molson Coors has seen a boost in both its distribution as well as its presence in supermarkets with more retailers listing its beers. In fact, this momentum and knock-on revenue spike is what has boosted the business to such great heights and reinforced distributor confidence in listing Molson Coors’ beers.

Hattersley confirmed: “In the US, our core brands are growing distribution and space at retail. And we expect to gain significantly more space in the spring. Last year, our brands in the US also grew more share of the on-premise than any other brewer. This includes our core brands, and it also includes growth for Blue Moon. Coors Light and Miller Lite each grew more dollars in the on-premise than Constellation did as a total brewer. I’ll let that sink in for a second. Because of this momentum, we added an incremental US$1 billion in distributor revenue to our network in 2023, and our distributors are just as motivated to grow again this year.”

Molson Coors is, crucially experiencing loyalty with its newly-acquired consumers it has inarguably gained from boycotts from previous Bud Light drinkers moving across to its portfolio since the AB InBev brand was scrutinised during recent marketing blunders. The plan now is for Molson Coors to help its drinkers discover and explore the rest of its portfolio.

Hattersley admitted: “Perhaps most importantly, the consumers who have come to our portfolio over the past 12 months have stuck with us, and they are more loyal than we have historically seen. So we brought new consumers into our portfolio, we’ve retained our loyal base and our plans for 2024 are designed specifically to bring in even more new consumers and there’s no better place to start than with our core brands.”

In terms of its brands, Molson Coors will be boosting Banquet with younger drinkers after its draught lines have been doing well in bars, while there are also plans to get behind Coors Lite and Miller Lite taking advantage of display space in stores. This, it was noted, worked well in the lead-up to the Super Bowl where the brands were snapped up by people looking to take beers home and yet also meant that the brands weren’t limited to fridge and shelf space and could really create impactful floor displays in stores to encourage impulse buys before a big game.

Hattersley explained: “We have a lot of runway on Banquet, especially with younger legal age consumers. We gained more distribution in 2023 and grew on-premise draught lines for Banquet by nearly 50% in the fourth quarter alone. So you can expect to see us putting a lot of focus behind Banquet this year, along with Coors Light and Miller Lite. Coors Light and Miller Lite have grown significantly at retail, gaining more dollar share of displays in 2023 than any other beer brand. And that trend has continued in 2024 and with Coors Light, Coors Banquet and Miller Lite growing dollar share of displays by nearly 20% in the four weeks leading up to the Super Bowl.”

He insisted: “This is an incredibly important point. And the reason why is quite simple, store shelves and coolers have a finite amount of space. So floor displays represent incremental space and high visibility. This added space also means more days of inventory at retail for our brands. And from a consumer perspective, it means our brands are placed in areas of the store where they’re more likely to sell quickly.”

Hattersley did hint that based on the conversations Molson Coors is having with top retailers, he expects to gain “significantly more distribution and space” for the business’s brands in 2024.

For the Super Bowl alone, Coors Light was the real winner, hugely bolstered by all of the displays at retail level.

As Hattersley explained: “In the four weeks leading up to the Super Bowl, we added an incremental 160,000 display units of Coors Light at retail. During the same time, Coors Light velocities grew by nearly 14%. So not only are we selling much more beer, it’s also selling much faster.”

In March, Molson Coors is planning to launch a campaign for Miller Lite which Hattersley says is “some of the best work I’ve seen on Miller Lite in a long time, and that’s a very high bar”.

For Molson Coors, the growth of its core brands is not limited to the US and, in other global markets, has “plans to continue the momentum in 2024”. For instance, “in Ontario, Coors Light and Molson Canadian are now the number one and number two beers in the total market, and both brands grew share of the industry in Canada for the full year,” said Hattersley and observed that “Miller Lite, which sells at an above premium price point in Canada continues to grow at a rapid pace with fourth quarter volumes accelerating up nearly 60%”.

Plus, Hattersley highlighted how “in Croatia, Ožujsko achieved its highest share levels in recorded history and now holds more than a 50% share of the segment”.

In the UK, it was noted that “Carling grew value share versus its competitive set in the fourth quarter” and now that Carling is now the first official beer partner of the Men’s and Women’s FA Cup, the tie-up has offered “significant visibility and relevance for the brand in 2024”.

In the fourth quarter, Molson Coors’ EMEA and APAC business “achieved a record high 52% of its net brand revenue at an above premium price point” and, as Hattersley pointed out: “In the UK, Madri Excepcional continued its growth streak” and “in the fourth quarter, Madri was the fastest growing major beer brand in the UK, both by volume and value sales”.

Hattersley revealed that “Madri’s volumes grew by 80% for the full year, easily surpassing a million hectolitres” and admitted that “growth like this does not come easy in the beer space, especially in less than three years for a new to the world brand that launched during a pandemic. We have some expansion with Madri, so it should not be a surprise that we have ambitions to scale this brand and expand its global footprint”.

Last month, Molson Coors announced that it is launching Madri in Canada, and the product is rolling out onto shelves starting this week. Hattersley added: “We plan to grow this brand thoughtfully in markets where the opportunity and desire are clear. We are starting with Canada and select European markets this year. So that is our focus right now, and we will consider future expansion when the time is right.”

In terms of its flavour portfolio, Simply Spiked continues to be “a growth engine” for Molson Coors. Hattersley described how “this brand more than doubled its volume in the US in 2023” and revealed that “Simply Spiked Peach was the number one innovation by volume and dollar sales in the grocery channel” plus, he added: “Simply Spiked is also gaining ground in Canada” after the brand launched nationally less than a year ago.

Hattersley explained that, along with brands like Coors Seltzer and Vizzy, Simply Spiked has driven Molson Coors to become the only major brewer growing share of flavour in Canada and revealed that there is a plan to launch “Simply Spiked Lemonade in the US this month”.

Hattersley also divulged that, in March, Molson Coors’ “the new-to-the-world innovation Happy Thursday would hit shelves and eCommerce platforms across the US” and stated that the business has “gotten great responses from retailers” and will be supporting both Simply Spiked Lemonade and Happy Thursday with “strong marketing and sampling activations in every region of the country this spring and summer”.

Hattersley said that, despite feeling confident based on so much growth and success, Molson Coors would still move forwards into 2024 with an air of caution and admitted, however, that the firm is committed to growth.

He concluded: “Are we cautious about the year ahead? Of course. While inflation has come down, there are still plenty of reasons to be wary about the macro environment, but our strong results give us confidence in our ability to deliver in 2024. I know a number of you remain sceptical of our ability to grow this year. We were sceptical in 2022 and also in 2023, but the numbers don’t lie. We delivered what we said we would. So for 2024, here’s what I will say, we are committed to growth.”