Following Molson Coors’ Q4 and full-year earnings report Tuesday, CEO Gavin Hattersley fielded questions from analysts on a range of topics from the stickiness of his company’s share gains, to why draft trends are struggling, to overall industry performance.
Here are a few highlights from the investor call – and if you missed this morning’s breakdown of the numbers follow this link for the full rundown.
On Molson Coors’ increased shelf space and potential spring/summer shelf set gains … Molson Coors gained around +7% more space during last summer and fall, which Hattersley called “a huge increase for a brand this large.”
For spring 2024 resets, the expectation after talks with the company’s top retail partners is “to gain significantly more distribution and shelf space” for its brands on top of 2023’s increases. That includes one of its largest chain retailers, which has confirmed added space for its core brands. Hattersley noted that the gains will be phased in between March and July.
In the build to the Super Bowl, Molson Coors “added an incremental 160,000 display units of Coors Light at retail,” he added. Velocities of Coors Light increased nearly +14%.
“So not only are we selling much more beer, we’re also selling much faster,” he said.
After the Chill Train’s return for the Super Bowl, the Coors Light “Choose Chill” campaign will carry the brand throughout the year, featuring country music star Lainey Wilson.
In March, the company will launch a similar sized campaign for Miller Lite. Hattersley declined to offer details other than saying “it’s some of the best work” on the brand that he’s seen “in a long time.”
On continued market share growth … Hattersley said Molson Coors believes the consumer shifts that started in 2023 with the conservative-led Bud Light boycott “are permanent.”
“Our data shows that the majority of consumers who switched to our brands post-April have stayed with us throughout 2023,” he said.
Hattersley added that Molson Coors’ momentum has carried over from Q4 into Q1.
“In the U.S., Molson Coors is beating all brewers in year-to-date dollar share growth by growing 1.5 points,” he said. “We’re ahead of Constellation’s share growth. ABI [Anheuser-Busch InBev] continues to decline more than any other major brewery in the U.S., losing about 4 ½ points year-to-date. From an industry point of view, we would expect the U.S. industry to fall back to flat to down -1% level, and we would expect to gain share as we continue into this year.”
Molson Coors expects to increase price in the +1% to +2% range, on a market-to-market basis.
On Blue Moon … Hattersley admitted that 2023 was a “challenging” year for the brand. However, the brand has seen improvement in the on-premise, where it has grown share in the last four weeks, per CGA data.
“Obviously, we’re not satisfied with the brand’s performance,” he said. “We’ve got big plans to turn it around in 2024.”
Those plans include a packaging refresh and a new brand campaign rolling out in March. Innovations on the way include Blue Moon non-alcoholic (NA) – which Hattersley said is already the No. 3 craft NA by volume in the last four-week period – and the rechristening of Blue Moon Light Sky as Blue Moon Light.
On draft volume struggles … Hattersley pinned it on craft’s “negative draft performance” and the number of craft beer brands that “might be being discontinued in the on-premise” channel. He added that Molson Coors is back to near pre-COVID levels in the on-premise in most of its top markets.
“We were by far the biggest share gainer in the channel last year,” he said. “We grew three times faster than the next major brewer. It’s not just premium lights that are growing share. It’s brands like Blue Moon and Coors Banquet, and Miller High Life is growing share as well.
“I think some of the weakness you’re seeing is coming from the proliferation of craft brands.”
On U.S. beer industry volume trends … Hattersley claimed volume trends improved during 2023, notably in Q4, “which was consistent with strong improvements in consumer spending.”
“In fact, the overall beer category gained dollar share of total alcohol-beverage in 2023,” he said.
Molson Coors “led the industry volume improvement during 2023,” Hattersley said, and the company expects to grow its top-line business again in 2024.
“So for 2024, here’s what I will say: We are committed to grow, and for the long-term,” he said. “We have shared our growth algorithm and we intend to deliver on it just as we have delivered on what we have said we would over the past four years.”
On Simply Spiked … Hattersley called the flavored malt beverage (FMB) brand a “growth agent” that “more than doubled its volume in the U.S. in 2023.” Simply Spiked Peach was the top innovation by volume and dollar sales in the grocery channel.
To further those trends, Molson Coors is launching Simply Spiked Limeade in the U.S. The company’s other flavor play, the non-carbonated Happy Thursday spiked refresher brand, rolls out in March. He promised strong marketing and activations for both brands across the country.
On the expiration of the Pabst contract brewing agreement … the company is anticipating a -3% decline, or 2 million hectoliters for its Americas financial volume.