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CASTLE MALTING NEWS in partnership with www.e-malt.com Ukrainean
28 October, 2021



Brewing news World: Molson Coors Beverage Company delivers 1% net sales revenue growth in Q3 2021

According to President and CEO Gavin Hattersley, the Molson Coors Beverage Company will continue to focus on the premiumization of their portfolio and their continuing expansion into non-alcohol products. Those two priorities were reaffirmed during the company's third-quarter earnings call on October 28 that focused heavily on the results being delivered from the brewing giant's 2019 revitalization plan.

The company delivered a +1.0% net sales revenue against a decrease of 3.6% in volume primarily driven by a decline in economy brands in the United States due to numerous non-core economy brands being discontinued. "Our focus is on revenue, not necessarily volume. The quality of our revenue and the changing shape of our portfolio is what is important to us now,” Hattersley said.

When the change in direction was announced in 2019, after the beverage maker recorded a 3.2% decline in net sales in the third quarter, Hattersley said that they did not expect to see the economy beer segment grow in the future. The pivot was a “deliberate reflection on where we see future growth beyond beer. We’re going to take more calculated risks. We’re going to move faster. We’re going to diversify our portfolio’” the CEO said then.

One area the earnings call focused on was the results of their two Hard Seltzer brands. Vizzy grew 50% and is now in a top 4 US Hard Seltzer brand according to IRI data, and their Topo Chico Hard Seltzer launched in conjunction with Coke is a hit and will be rolled out nationwide early next year. While there has been much said about the softening of the Hard Seltzer market lately, especially after the Boston Beer call last week, Hattersley remained bullish on them.

“We have been saying for more than a year now that (Hard Seltzers) couldn’t continue to grow at the pace they were at, but they are now a part of the alcohol space, and they are here to stay. It's important now in this new space for strong brands with a clear point of difference. That's why we feel so good about our two brands."

The company also announced that they have almost crossed the two million case threshold for non-alcohol products shipped in a year for the first time. That is putting them on pace to hit their stated 2023 annual revenue growth goal of $1 billion in their emerging growth business. Those numbers were primarily driven by their ZOA energy drink and La Colombe Coffee drink.

Their Above Premium portfolio net sales revenue of 25% of their net brand sales volume was heralded as another sign that the company was heading in the right direction. The portfolio is gaining share in the US and internationally, leading to higher margins and better bottom lines. These results, in particular, were called out for one of the main reasons the company was able to report positive net sales revenue against decreased overall sales. The joint venture with Yuengling, the growth of Peroni and the Blue Moon catalog, plus other projects like the Coors Whiskey Company, Superbird RTD, and Six Pints in Canada all contributed.

One of their flagships, Coors Light, reported a growing share in the United States for the first time in five years. That is due to an expanded focus on marketing for the brand that Hattersley said aligns with their plan to reinvest in core brands to help drive their growth. He said they would spend more on advertising in the fourth quarter than during the same timeframe in 2019. Over half of their marketing budget will be spent on digital advertising and research, such as the just announced a partnership with Innovid and LiveRamp to target their campaigns better.

The effect of inflation, supply chain issues, and shipping shortages are expected to hit the bottom line next quarter. But the company said they would mitigate these with the continued focus on higher-margin products and the other steps they have put into place, such as building up a backlog of supplies and a ten-year-old shipping cost-sharing program they have with their distributors.

The company is heading in a direction that Hattersley put them on two years ago, and it seems to be paying dividends. "I remain confident that we are on track to deliver our full-year key financial guidance for 2021."





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