Molson Coors’ Innovation Strategy to Focus on Spaces with ‘A Right to Win’

Molson Coors Beverage Company’s innovation strategy moving forward will focus on the segments where the company believes it has “a right to win.” Those areas include low- and no-alcohol beer, flavored adult beverages, whiskey, energy drinks and pure-play non-alcoholic beverages

Chief commercial officer Michelle St. Jacques provided a high-level view of the strategy during a Q&A with CMO Sofia Colucci, VP of innovation Jamie Wideman-Rotnicki, executive chairman of Coors spirits David Coors, VP of non-alcoholic Kevin Nitz and Coca-Cola’s chief of new revenue streams Dan White.

Innovation Inspiration

Wideman-Rotnicki set the expectations for Molson Coors’ innovation strategy last year with a “fewer, bigger, bolder” mantra. That strategy carries over to 2024. She said she looks at non-alc to see which flavors are becoming popular and “consumers are really gravitating toward.”

Wideman-Rotnicki’s team also looks to bars and restaurants to see which “ingredients bartenders are obsessed with, because those ingredients are ultimately going to make it into our aisle.”

Molson Coors also looks at what legal-drinking-age Generation Z consumers’ are drinking.

“Their behaviors are just different,” she said. “They’re switching, they’re not ditching alcohol.”

On taking new brands to market, Wideman-Rotnicki said the company will deliberate and take a regional approach, pointing to the roll out of another Coca-Cola partner brand, Peace Hard Tea, in the southeast before scaling the brand elsewhere.

Wideman-Rotnicki made it clear that the company will still “take big swings” but they need distributors’ help in executing against those brands.

Finally, she shared that the company has changed the way it approaches its retail partners with new products. Wideman-Rotnicki’s team is sharing its innovations with its top retail partners and a consumer panel, getting their feedback, and then iterating on that feedback before taking those items to its distributors.

Growing Share in Flavor

Colucci shared how Molson Coors is prioritizing its approach to hard seltzers as the segment continues to decline double digits. She noted that hard seltzer is still bigger than spirits-based seltzers and an entry point for consumers.

“We’ve been really focused and thoughtful about having a diversified approach in flavor, and because of that, we’re the No. 2 share grower in flavor,” she said.

Molson Coors’ strategy with hard seltzer is to present differentiated brands, such as Vizzy Hard Seltzer and Topo Chico Hard Seltzer, that are incremental to their distributors’ portfolios.

“We know you carry the No. 1 and 2 hard seltzers in the category,” she told the wholesalers in attendance. “For us, our job is bringing incremental solutions that will make it easy for you.”

Coca-Cola Committed to Existing Partnership Structure

Coca-Cola’s White said the carbonated soft drink maker’s future in beverage alcohol “is going to be built on this existing structure” with Molson Coors.

“What we want to reinforce from a Coke perspective is we’re not here to change things, but we’re here to grow the business together,” he said.

Asked about Coca-Cola’s formation of Red Tree Beverages alcohol subsidiary, White said it was established “as a governing and operating organization” separate from the core business. It’s not a signal that Coca-Cola will get into the distribution business, like competitor PepsiCo.

Colucci added that Molson Coors is proud of its successes with Coca-Cola partner brands Topo Chico Hard Seltzer and Simply Spiked.

“Eight out of 10 innovations don’t make it past Year Two,” she said. “The fact that we’ve had such tremendous success on the two first initial ones with Coca-Cola have been great.

“Our focus is really to make sure that we nurture these brands, and we continue to grow them,” she said. “We will innovate there, but we’re going to be very deliberate and choiceful.”

Spirits Needs to Be Treated Different Than Beer

Coors stressed the importance of treating spirits different from beer in case price, the speed it turns, the credibility needed to sell it and how it is treated on-premise.

“A case is not a case,” Coors said. “If you think about a case of beer in a retail account, let’s call it $20. A case of whiskey in an account is $200-$400, maybe more.”

In the off-premise channel, Coors said selling a bottle of spirits a week is good, while in beer, moving a case is good. In the on-premise channel, he said it’s not good enough to get a bottle on the back bar.

“It’s got to be on the menu,” he said. “The best way to secure some base volume is getting on the cocktail menu.”

Beyond Molson Coors’ own whiskey brand, Five Trail, the company made its first spirits acquisition this year, acquiring Blue Run Spirits in Kentucky, further showing its commitment to the whiskey segment.

Go Time for Non-Alc

“It’s go time” for Molson Coors’ non-alcoholic beverages, Nitz said. The two spaces Molson Coors will play in non-alc moving forward is energy drink ZOA and a pure play offering that the company declined to share details on.

Nitz sees a two-pronged approach to non-alc, offering products to defend occasions with non-alc offerings and products that create new non-alc only occasions for the company to play in. He stressed that non-alc plays offer incremental dollars to both Molson Coors and its distributor partners.