Dive Brief:
- Molson Coors Beverage Company plans to gain one-third of its net sales revenue through premium alcohol offerings by “aggressively” premiumizing its portfolio, executives told investors this week. The shift is forecast to contribute to low-single-digit annual net sales revenue growth for the company.
- A push to increase its premium portfolio has driven change for the beverage giant in recent years, increasing its sales revenue from upscale offerings from 23% in 2019 to 28% in 2022.
- In a statement, CEO Gavin Hattersley referenced the issues competitor AB InBev has faced this year, saying Molson Coors has seen growth “long before controversy upended the U.S. beer industry.”
Dive Insight:
Despite being known best for mainstream beers such as Miller Lite and Blue Moon, Molson Coors is leaning heavily into the premium alcohol space as it diversifies its portfolio.
Since Hattersley took the reins in 2019, the company has grown its market share outside of the stagnant beer space. The CEO told Food Dive the company’s portfolio was “pretty challenged” during that period because consumers were looking for other options like hard seltzers and energy drinks. He made the decision to overhaul its corporate structure and prioritized branching out to the wider beverage industry.
“Getting to growth was the focus of our 2019 Revitalization Plan, and as a result of three plus years of work we are on track to deliver our second straight year of top and bottom-line growth,” Hattersley said in a statement. “We turned around Molson Coors over the past few years, and our focus now is on accelerating the growth we created in the years ahead.”
Over the past three years, this plan has included the launch of canned products in trendy categories, like Vizzy Hard Seltzer, and three collaborative products with beverage giant Coca-Cola: Simply Spiked lemonades, Topo Chico Hard Seltzer and Peace Hard Tea. The company noted the success of Simply Spiked and Arnold Palmer Spiked helped increase sales revenue in its “Beyond Beer” product line.
Molson Coors has recently turned to M&A to bolster its presence in spirits.
In August, the company made its first acquisition of a spirits brand when it bought Blue Run Spirits, a Kentucky-based premium craft whiskey producer, for an undisclosed amount. In a statement, Molson Coors’ chief commercial officer Michelle St. Jacques said the purchase of the whiskey maker marked the beginning of an effort to build a strong lineup of spirits.
As many consumers begin drinking less, Hattersley’s new approach for Molson Coors has also brought it into the nonalcoholic beverages category.
Last month, Molson Coors expanded its partnership with Zoa Energy, a premium zero-sugar energy drink co-created by actor Dwayne “The Rock” Johnson, increasing its marketing and distribution. The beverage saw a 138% increase in sales in 2022, netting $100 million, according to the company. And earlier this year, the Miller High Life maker debuted Roxie, a line of nonalcoholic ready-to-drink cocktails aimed at millennials and Gen Z.
