Receive free Molson Coors Canada Inc. updates
We’ll send you a myFT Daily Digest email rounding up the latest Molson Coors Canada Inc. news every morning.
Brewer Molson Coors has capitalised on the upheaval in the US domestic beer market, reporting record quarterly sales and upgrading its full-year outlook following the controversy that has engulfed rival brand Bud Light.
The Chicago-based company reported its best quarterly sales since Canada’s Molson merged with US brewer Coors in 2005, and saw an increase in sales volumes in its home market for the first time in at least a year.
Sales of Bud Light, which is made by AB InBev and had long been the top-selling beer in the US, tumbled for several consecutive weeks after a promotional collaboration with transgender TikTok personality and actress Dylan Mulvaney in April prompted a conservative backlash. The controversy caused AB InBev to end the partnership and place two executives on leave.
That has allowed other brewers to soak up market share. Modelo, which is sold in the US by Constellation Brands, dethroned Bud Light in May as the country’s best-selling beer. Weeks later, Constellation reported record first-quarter sales.
Molson Coors said on Tuesday that a year ago, Bud Light was a bigger label in the US than Coors Light and Miller Lite combined, but that dynamic has been upended.
“Coors Light and Miller Lite, combined, were 50 per cent bigger than Bud Light by total industry dollars and 30 per cent bigger than Modelo Especial” in the second quarter, Molson Coors chief executive Gavin Hattersley told analysts on Tuesday. The company also said its premium beers in the US had performed well.
“Beer drinkers are incredibly loyal,” Hattersley said. There have been “some pretty seismic shifts across the industry . . . so what really matters here for us is that more consumers are reaching for our beers versus our competitors”.
Even higher prices around the national holidays of Memorial day and July 4 did not turn US consumers off Molson Coors’ drinks. Chief financial officer Tracey Joubert said prices would increase again in the autumn.
The brewer said brand volumes in the US, its primary market, rose 8.7 per cent, marking the first increase in several quarters, and helped offset weakness in markets such as central and eastern Europe.
The changing landscape in the US contrasts with some of the trends reported by Heineken, the world’s second-largest brewer, which earlier this week conceded the “cumulative effect of pricing actions” caused sales volumes to contract in its latest quarter.
“We didn’t plan on our largest competitor’s largest brand declining volume by nearly 30 per cent during the quarter,” Hattersley said, and that without steps in recent years to streamline systems and invest in facilities, it might have struggled to meet that unexpected jump in demand.
The impact of AB InBev’s Bud Light hangover will be laid bare on Thursday when it reports second-quarter results.
Molson Coors’ net sales in the three months to June 30 were $3.3bn, marking a 12 per cent increase from a year ago, but fractionally below Wall Street’s expectations. Net income of $342.3mn surpassed analysts’ forecasts.
Molson Coors shares hit a five-year high last week, but were down 3.7 per cent on Tuesday.
The brewer now expects its annual sales growth to be in the high single digits instead of low single digits.