Brands such as Blue Moon, Mad Jack Apple Lager and Rickard’s Radler showed strong growth over Molson Coor’s latest quarter – in the face of an overall 15.4% decline in net sales and 1.9% volume decrease for the North American brewing company.
The Canadian portfolio is shifting towards the above premium sector. Blue Moon, its popular US craft beer, is launching in Canada this month as Belgian Moon. It will be available at select restaurants and bars from Friday before entering retail in January next year.
“In Canada, we continue to invest in our core brands and Above Premium, including craft, imports, cider and flavoured malt beverages,” said Hunter.
“The strong performance of the Coors Banquet, Mad Jack Apple Lager, Rickard’s Radler and Molson Canadian Cider brands are influencing the transformation of our portfolio toward the above-premium segment, and our expanded partnership for the Heineken, Dos Equis, Sol and Strongbow brands is delivering volume and share,” said Hunter in the earning’s call for the quarter.
However, he acknowledged the termination of the Miller brands licence agreement earlier this year would present a headwind for the coming quarters (Molson Coors is no longer distributing SABMiller beers such as Miller Genuine Draft and Miller Lite in Canada, after reaching a settlement on the issue last year).
In Europe, underlying pretax income decreased by 21.5%, put down to unfavourable foreign currency movements and terminated Modelo and Heineken contracts in the UK.
But craft beers and the above premium category were the bright spots in the region. In addition Molson Coors saw higher beer volumes in Croatia, Bosnia and Serbia (which were badly affected by flooding last year).
“In core brands, Carling trends improved from earlier in the year, and Ozujsko and Bergenbier grew volume and segment share in their core markets,” said Hunter. “And our craft and above premium portfolio continued to perform well, with Coors Light, Doom Bar and Staropramen achieving strong growth in the quarter.”
Molson Coors has terminated its agreement with Carlsberg in order to repatriate the exclusive distribution rights for Staropramen beer in the UK. Molson Coors UK has also secured the rights to distribute and sell Swedish Rekorderlig ciders in the UK, Ireland and Channel Islands.
“Starting in 2016, we expect these two brands to add more than 350,000 hectoliters of above-premium volume annually to our Europe business and provide attractive growth potential for the future,” said Hunter.
Continuing to boost premium brands is one of Hunter’s three priorities for the US going forward.
“We'll continue to premiumise the portfolio, and further develop above premium offerings that have the potential to build scale quickly and sustainably,” he said.
“Examples include the successful launches of Blue Moon White IPA [in April this year] and Leinenkugel’s Grapefruit Shandy, along with the expansion of Blue Moon Cinnamon Horchata 6-packs [initially launched last August in New York and select cities in California, Texas and Colorado].”
Another new release was Leinenkugel’s seasonal shandy-style beers, Harvest Patch Shandy [launched last September], added Hunter.
In the US, it will also focus on growing its portfolio of American light lagers, Coors Light and Miller Lite. For Coors Light, this includes the continued roll-out of a contemporary visual identity on packaging, and a national TV campaign to emphasise Coors Light’s Rocky Mountain heritage.