Molson Coors: 5 ways it plans to accelerate growth
The refined strategy balances nurturing core beer brands – such as Coors Light, Miller Lite and Coors Banquet – against exploring new ‘beyond beer’ areas for the company such as energy drinks, craft spirits and hard seltzers.
“We have proof that we can grow; we have the people to accelerate our growth, and we have the plans to accelerate our growth,” said CEO Gavin Hattersley, speaking to investors and analysts in New York earlier this week.
'We turned around Molson Coors; now our focus is on accelerating growth'
In 2019 Hattersley declared that Molson Coors was ‘at an inflection point’: saying the company had to ‘make the significant and difficult changes necessary to get back on the right track’.
Its revitalization plant included restructuring the business (most notably by moving from a corporate center and four business units to two clearly distinct business units, North America and Europe), investing in modernization projects and creating a single leadership team.
It also changed its name from Molson Coors Brewing Company to Molson Coors Beverage Company: clearly signalling its intention to make serious moves beyond its core beer portfolio into new, trending areas.
Speaking in New York this week, CEO Hattersley said that, after three years, the company is on track to deliver its second straight year of top and bottom line growth.
“Today we believe we are built for growth, we expect growth, and we are delivering growth,” he said. “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.”
The focus now is on refining its strategy: centered on the following five pillars.
Long-term financial outlook:
- Low-single-digit annual Net Sales Revenue growth, on a constant currency basis
- Mid-single-digit annual Underlying Income before Income Taxes growth, on a constant currency basis
- High-single-digit annual Underlying Earnings per Share growth
- Net Debt to Underlying EBITDA of under 2.5x over the long term
1) Grow core power brand net revenue
Molson Coors says its core brands have been gaining strength, and it plans to consistently grow its core power brand revenue in the years ahead.
“In the US, Coors Light, Miller Lite, and Coors Banquet have been on an upward trajectory for several years, making them well positioned to benefit from the shifts in consumer purchasing behavior largely in the premium segment that have occurred in 2023,” says Molson Coors.
“Core brands in other large global markets have also been gaining industry share, including Molson trademark in Canada and Ozujsko in Croatia. Carling continues to be a top brand in the UK. We’re focused on continuing that momentum for these brands.
2) ‘Aggressively premiumize’ the portfolio
Molson Coors has increased net sales revenue from above premium from 23% in 2019 to 28% in 2022.
It now wants its Above Premium portfolio to reach around one-third of its net sales revenue, excluding contract brewing, factored and distributor owned brands in the medium term.
“Molson Coors has aggressively premiumized its portfolio, in both Beer and Beyond Beer, to meaningfully change the shape of its product portfolio,” says the company.
‘Major innovation successes’ for the company to date include Madri in the UK and Simply Spiked in North America.
3) Scale and expand in beyond beer
Molson Coors’ Beyond Beer portfolio includes Flavor, Spirits, and Non-Alcoholic.
“This Beyond Beer portfolio supports the company’s premiumization efforts and is focused on scalable products in higher-growth segments," says the company.
"From diversified flavor, including winners like Simply Spiked and Arnold Palmer Spiked, to acclaimed whiskey brands under the Coors Spirits Company, to energy drinks through its partnership with Dwayne Johnson’s ZOA Energy, the company expects its Beyond Beer portfolio to drive about half of its Above Premium net sales revenue growth over the medium term.”
Molson Coors has, for example, just increased its minority stake in ZOA Energy: saying it believes the innovation is 'poised to be the next big energy drink brand'.
It also made its first acquisition in spirits in August, acquiring Kentucky's Blue Run Spirits (pictured right).
4) Invest in capabilities
Molson Coors intends to continue to invest in building leading capabilities and efficiencies: highlighting digital transformation, marketing effectiveness, sales execution, and sustainability initiatives.
Since 2019, the company has increased aluminum can production capacity, built a new US variety packer, added a can line in Croatia, built a new state-of-the-art brewery in Canada, broke ground on a major modernization in its Golden Colorado brewery, and added flavor production capabilities in the US, Canada, and the UK.
“The company’s digital transformation has enhanced the effectiveness of its marketing and sales efforts as well," says Molson Coors.
"Continued investments in these capabilities are expected to help drive growth and margin expansion through productivity improvements, operating efficiencies, and cost savings.”
5) Support its people, communities, and planet
Molson Coors recommits to its core values, the first of which is “Put People First” along with investing in their success and supporting the communities in which it operates globally.
Hattersley commended the more than 16,000 employees around the world who helped deliver growth over the past several years, along with the fundamentals of the Revitalization Plan.
