Molson Coors measures Blue Moon against the total industry, not just craft, CEO Gavin Hattersley explained Tuesday during the Morgan Stanley Global Consumer and Retail Conference.
“We don’t measure it on craft because craft’s really struggling at the moment. And so we’re measuring success with Blue Moon on the total industry,” Hattersley said. “And on the last few reads, certainly for a couple of months now, it’s been relatively flat, whereas it was down quite a lot a year ago.”
Year-to-date through November 3, off-premise dollar sales of the Blue Moon brand family have declined -7.7%, to more than $256.9 million, according to market research firm Circana. The brand’s volume declined -9.6%.
The Blue Moon family is the 24th largest in the beer category, per Circana.
Hattersley admitted that there is still “lots of work to do” on Blue Moon, but he’s encouraged that the changes the company made so far seem to be making a difference, including creating a more cohesive Blue Moon brand family, re-introducing Blue Moon Light Sky as Blue Moon Light and adding a non-alcoholic version of its core beer.
Here are a few additional notes from Molson Coors’ chat with Morgan Stanley:
Simply Spiked $100M Brand
Flavored malt beverage (FMB) Simply Spiked is now a $100 million brand for Molson Coors.
“I see that as a success, building it from nothing,” Hattersley said.
Several of Simply’s top packages have declined double digits year-to-date in multi-outlet and convenience stores tracked by Circana. Hattersley noted that Simply Spiked’s cranberry limited-time-offering has “landed very well,” and the company is rolling out a convenience channel strategy that will include the launch of higher ABV brand Simply Spiked Bold.
Coors Banquet a Top 4 Brand
Coors Banquet is now a top four brand for Molson Coors, Hattersley said. He pointed to its connection in western heritage, including a partnership with popular TV franchise, Yellowstone.
The brand is growing double digits and the company is now working to close the distribution gaps between it and other core offerings, Miller Lite and Coors Light.
Holding Onto Shelf Space
Molson Coors retained the share of shelf sets that it gained last fall and spring into the most recent fall resets, Hattersley said. The company posted gains in the wake of last year’s Bud Light boycott.
Hattersley said: “That, in and of itself, was a big win, because we gained a lot, and to gain even more on that, we felt really good about. And so our expectation is, as we head into spring of next year, that it will be the same.”
Bumpy Q3
CFO Tracey Joubert described the third quarter as “up and down.” July and August were “down” with a slight bounce back in September and October, before a “pull back” in November so far (the full data set isn’t in yet).
“We’re very happy with the performance of our brands,” she added.
Joubert noted that Molson Coors’ U.S. business is “insulated from an import tariff point of view,” as the company sources most of its inputs domestically.
In the convenience channel, Hattersley said the company saw a slight acceleration in consumers turning to smaller and larger pack sizes, but they’re not seeing consumers trading down from a brand perspective.
He added: “We’re certainly seeing consumer behavior drive into that singles and large pack space, which in some cases impacts the c-store positively, in some cases not. Certainly it impacts the bigger box stores more positively, that’s for sure.”
Asked about pricing, Hattersley said he expects the company to be “towards the top end” of its +1% to +2% price increase range.
Losing 1.2M HL of Pabst Contract Volume
Pabst’s long-stranding contract brewing deal will expire at the end of 2024, and Molson Coors will lose around 1.2 million hectoliters of contract volume, Hattersley said.
The loss will “be a headwind” to the company’s top line, but it will also remove complexity, Joubert added. It will also be a positive from a margin point of view, since the contract business is “low margin.”
Joubert said: “We are quite happy to not be in that business anymore.”
Sticking to ‘String of Pearls’ M&A Approach
Molson Coors will continue its “string of pearls” approach to mergers and acquisitions, which Hattersley noted has proven successful with non-alcoholic incubator LA Libations working and leading to its business relationship with Coca-Cola and energy drink ZOA, in which it now holds a majority stake in.
Hattersley said: “Five years ago, our string of pearls might have been $10 million, and where we are from a leverage point of view, the string might be $100 million or $120 million, but we see that works well for us with our capabilities and the resources that we’ve got to make these things work.”
The company expects to add to its NA portfolio, Hattersley added.
“We’ve got a nice foundation, and we need to double down on that, on that capability,” he said.