Dive Brief:
- Molson Coors believes shifts in the beer industry and its boosted market share are “permanent” changes, after it saw consistent growth of its main brands over the last nine months, the company’s CEO Gavin Hattersley said on the company’s quarterly earnings call Tuesday.
- The company beat Wall Street earnings predictions, with 9.3% net sales growth in 2023 and 6% revenue growth compared to its previous quarter. Analysts underestimated the lasting impact of the consumer boycott of AB InBev’s Bud Light that began last spring.
- The maker of Coors Light has capitalized on the weaker position its rival in the beer category is in, boosting its marketing spending 19% in the last quarter.
Dive Insight:
The shakeup in the beer category continues to play out, with giants in the space taking advantage of shifting consumer purchasing habits.
For several years under the leadership of Hattersley, Molson Coors has focused on its “Beyond Beer” strategy, which continues to play out as it grows its presence in premium spirits and ready-to-drink canned cocktails through investments and new product launches. But the unique fracturing of the beer category is allowing the company to reestablish a strong footing in the space it knows best.
“Growth is not a strong enough word to describe what we achieved in 2023. We’ve set a new baseline for our business, and you don’t need to look any further than our bottom line,” Hattersley said on the earnings call.
The CEO pointed to ballooning sales in several beer brands is responsible for driving the company’s success, with Coors Light, Coors Banquet and Miller Lite each seeing double-digit volume growth in the last quarter alone.
Robert Moskow, an analyst at TD Cowen, said in an investor note Molson Coors beat its earnings per share estimate by 7 cents, and predicted the company will retain the market share it picked up following the Bud Light boycott.
AB InBev is still reeling from the fallout of the Bud Light imbroglio, which was triggered last April when a marketing campaign with transgender influencer Dylan Mulvaney sparked controversy in conservative circles. The company felt the impact of the boycott swiftly last year, laying off hundreds of corporate employees in July.
In its financial quarter ending last fall, AB InBev’s revenues in the U.S. declined 13.5%. The company’s executives pointed to data finding that 40% of lapsed consumers would be willing to return to Bud Light. AB InBev is scheduled to report its most recent earnings report on Thursday, Feb. 29.
