Four years after debuting the revitalization plan that helped put it on its current path, Molson Coors rolled out a new acceleration plan to continue its growth during a strategy day for investors on Tuesday.
Thanks to “substantially improved financial flexibility,” Molson Coors will enact a $2 billion share buyback program over the next five years, chief financial officer Tracey Joubert said in a press release.
“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,” CEO Gavin Hattersley said in the release. “Over the past few years, long before controversy upended the U.S. beer industry, we changed how we invest, market, and operate, and we changed our future.
“Today we believe we are built for growth, we expect growth, and we are delivering growth. 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,” he continued.
Some of the gains of the company’s flagship premium light brands Coors Light and Miller Lite can be attributed to monumentous declines Anheuser-Busch InBev’s Bud Light suffered after conservative-led consumer boycotts.
“The premium light segment is being dragged down by one competitor and one competitor alone,” chief commercial officer Michelle St. Jacques said during her presentation. “Coors Light and Miller Lite are not only growing share of premium lights, but of total light beer and more importantly, they’re growing share of total industry in both the U.S. and Canada.”
The company plans to:
- “Grow core power brand net revenue,” by maintaining Coors Light, Coors Banquet and Miller Lite’s “upward trajectory;”
- “Aggressively premiumize its portfolio,” by building on the success of flavor-forward innovations such as Simply Spiked and continue to grow its above-premium products’ share of revenue, which increased +5% since the launch of the revitalization plan, to 28% in 2022;
- “Scale and expand in beyond beer,” with flavor-forward products, spirits and non-alcoholic beverages;
- “Invest in its capabilities,” including “digital transformation, marketing effectiveness, sales execution, and sustainability initiatives;”
- And “support its people, communities and planet.”
Molson Coors leadership highlighted the “game-changing momentum” the company has felt since its biggest competitor lost a large amount of share during its wholesaler convention last month. The company debuted its innovation plans for its flavor, spirits and non-alc portfolios and plans to bolster its No. 1 craft brand Blue Moon.
Following the convention, 93% of wholesalers said they feel confident in the company’s “plans to build on the momentum and accelerate in 2024,” St. Jacques said. Molson Coors’ momentum in the wake of industry shifts have inspired 50 retailers to redraw planograms for their ongoing fall resets, she added.
However, some analysts poked holes in the company’s plans, including Bernstein analysts Nadine Sarwat and Trevor Stirling, who pointed out that Molson Coors’ premiumization of its portfolio lags behind A-B’s. In 2022, premium and below premium offerings accounted for 81% of Molson Coors’ portfolio, compared to 66% of A-B’s portfolio.
“There is no getting around the fact that despite the meaningful uplift enjoyed since the Bud Light social media controversy and ongoing efforts to premiumize the portfolio, Molson Coors’ U.S. volumes are still ~80% exposed to economy and premium light brands,” they wrote.
These categories have steadily been losing share for over a decade. Fighting that tide, even for improving brands, is no easy feat.”
While Miller Lite’s and Coors Light’s gains in the face of Bud Light’s losses may seem historic, Sarwat and Stirling noted Bud Light has been losing share to them for two decades. Last year, Bud Light accounted for 40% of the light beer segment across all channels, dipping below 50% for the first time in at least 20 years. Coors Light accounted for 27% of the segment, followed by Miller Lite (25%). However, these three premium lights combined for just 23.6% of the overall beer category last year, according to the Bernstein report.
Here are a few highlights from the day’s presentations:
- The company is increasing Coors Light’s media spend by +15% in the U.S. and +25% in Canada, where the brand recently became the No. 1 light beer. A chunk of the brand’s media budget will go toward a Super Bowl commercial for Coors Light, chief marketing officer Sofia Colucci announced last month.
- Coors Light has become the best-selling light beer in 11 states in the 13-week period ending September 17 according to Circana: California, Oregon, Washington, Idaho, Wyoming, Colorado, Minnesota, New York, New Jersey, Connecticut and Maryland.
- Dollar sales of Coors Banquet have increased +30% year-to-date through September 17 according to Circana. The 150-year-old brand only has 50% of the distribution of Coors Light, and the company is prioritizing closing that gap.
- Asked how the company could avoid a social media-spawn boycott against its brands, St. Jacques explained Molson Coors’ marketing compliance committee, an internal group led by the legal department consisting of “a diverse group of people across the organization, so that as we come up with new campaigns or new ideas, we hear from a broad swath of folks about what different reactions may be.”