Molson Coors is not shying away from being a “category captain,” and plans to use its leading status with retailers to drive a new “category first, Molson Coors best” strategy, leadership shared last week during the Consumer Analyst Group of New York (CAGNY) Conference in Orlando, Florida.
“The most important thing for us to do, the thing that will be best for our consumers, for our business and for our customers, is to be category first,” CMO Michelle St. Jacques said during the company’s one-hour presentation.
“When we are category first, when we act in the best interest of the category, we put Molson Coors at the forefront of growth,” she continued.
Molson Coors has about a 20% share of the beer industry, the second largest share behind Anheuser-Busch InBev (A-B). However, Molson Coors serves as the “category captain” – or the company that leads retailer strategies – in 50% of retail outlets, according to St. Jacques.
Note, the practice of category management or “category captain” was scrutinized by some industry members during a push to promote competition in the economy under the Biden Administration. However, no regulatory changes were made, and future restrictions around the practice remain unclear.
Molson Coors plans to use that influence to enact new strategies centered around growing the beer category – including integrating marketing across CPG products, partnering with “influential Gen Z consumers” and increasing investment in the convenience channel.
C-stores are one of the greatest opportunities for Molson Coors to capitalize on its “category first” strategy, according to chief commercial enablement officer Jeff Long. Beer increased dollar sales +23% in the channel in 2024, while c-store trips increased +27%, according to Long. Not only does the channel provide growth, but it overindexes with Gen Z consumers, which could help beer regain the attention of the youngest legal drinking age (LDA) consumers.
To fully tap into the potential of c-stores, Molson Coors has adjusted how it approaches innovation, and is looking at how it can tailor offerings more specifically for the needs and demographics of the channel, Long said.
“Historically with us, for innovation, we might not have looked very specifically at the demo in a convenience store, or the needs in a convenience store, to define the innovation priority we have,” he said. “We might be thinking very generally about a consumer need being consumer first, but maybe not being as specific about it. So how do we leverage what we’ve had, and the successes we’ve started, to continue to be more relevant to a consumer in that space?”
Molson Coors has 60,000 placements for new innovation items hitting c-store shelves in the spring, and its high ABV extension Blue Moon Extra is a “top priority” for 7-Eleven stores this year, Long said. However, Molson Coors’ plans for success go beyond shelf space, and require a complete shift in how beer markets itself in the channel, according to Long.
“Long gone are the days of simply listing a competitive price on the shelf,” Long said. “Instead, you target digital and proximity media to reach a consumer before they ever leave their couch. You bring escalating value offers on key packages, and you bring those offers to life with key merchandising materials in store.”
Long also encouraged industry members to explore more cross-promotional activity, leaning into “big brand partnerships” with food and beverage brands to influence consumer purchasing.
“All of that is in the name of being category first by creating stronger connections with our drinkers in those moments that matter, by bringing channel-specific innovation and solutions that unlock growth for retailers,” he added.
St. Jacques also highlighted Coors Banquet as an example of “category first” strategy, highlighting the beer’s ability to connect with consumers that can translate to other brands.
Coors Banquet has increased volume +50% since 2019, and is tied for the third largest brand within Molson Coors’ U.S. portfolio (fifth globally), St. Jacques shared.
The premium beer brand has a “cool and timeless” brand image that has connected with consumers, who recognize its “authentic consistency,” according to St. Jacques. And that connection is showing up beyond beer sales, with Coors Banquet merch sales increasing +150% in 2024.
Additionally, Coors Banquet has been able to balance keeping existing loyal consumers and attracting new drinkers, with a +30% increase in Gen Z consumers and +15% increase in Latino consumers in the past year, St. Jacques shared.
“In 2020, Banquet cracks the top 20 brands in the category,” she said. “Today, it fits as a top 15 brand, and we believe there’s no reason why Banquet shouldn’t be a top 10 brand in the category.”
Coors Banquet ranks No. 11 in year-to-date (YTD) dollar sales in Circana-tracked off-premise channels (week ending January 26). Its dollar sales increased +18.9% and volume +15.7% – the second largest growth within the top 20, behind Constellation Brands’ Pacifico (dollar sales +21.6%, volume +18.9%).
Additionally, Molson Coors has “partnered with influential Gen Z consumers” to help the company “build the propositions” for its offerings across both bev-alc and non-alc, St. Jacques shared. This collective is helping advise the company on “everything from liquid” to “packaging [and] design” to ensure that Molson Coors offerings “resonate with that important consumer demographic.”
Molson Coors has also commissioned a study into “mindful drinking habits” to better understand opportunities in the “better-for-you” space.
Molson Coors’ presentation follows the company’s Q4 and full-year 2024 earnings release earlier this month, which included results more lackluster than leadership’s enthusiastic presentation would suggest.
Molson Coors’ full-year net sales were nearly flat in 2024 (-0.6%), while financial volumes, or sales to wholesalers, declined -5%, and brand volumes, or sales to retailers, declined -2.5%. In the Americas, Molson Coors’ net sales declined -2%, while financial volumes declined -5.7% and brand volumes declined -3%.
For fiscal year 2025, Molson Coors is projecting low-single-digit net sales growth for its total business.
During last week’s CAGNY presentation, Molson Coors CEO Gavin Hattersley pointed out that Molson Coors’ U.S. declines were on top of significant shared growth in 2023, and that growth slowed significantly in 2024.
“Now it’s a high class problem,” Hattersley said. “It’s not a bad thing – we’ll take it every day of the week – but we also recognize that we’ve got work to do in the United States.”