Molson Coors unveils plans to accelerate growth
After three-plus years, Molson Coors has achieved the aims of its Revitalization Plan – the corporate strategy laid out in late 2019 to deliver consistent top- and bottom-line growth – and is refining that strategy to accelerate the company’s progress, CEO Gavin Hattersley told investors and analysts in New York.
“Our approach for the years ahead can be summed up in one word: acceleration,” Hattersley said. The company, he said, is growing net sales revenue in its top markets of the U.S., Canada and the U.K., and is on track to deliver its second straight year of top- and bottom-line growth, a trend he expects to continue.
Since 2019, the company has strengthened its core brands in its largest global markets, including the U.S., Canada, U.K. and Croatia. For instance, since 2021, Coors Light and Miller Lite have combined to grow net sales revenue in the U.S., with share, volume and revenue up year to date, as well. The company’s global above premium brands have grown net sales revenue more than 20% since 2019, with its global above-premium portfolio accounting for 28% of total brand net revenue in 2022. Its Beyond Beer portfolio now includes award-winning whiskeys and a growing energy drink brand, and it continues to invest in its capabilities and people.
“Over the past few years, long before controversy upended the U.S. beer industry, we changed how we invest, we changed how we market, and we changed how we operate. And in doing that, we changed our future,” Hattersley said. “We turned around Molson Coors. Today we are built for growth, we expect growth, and we are delivering growth.”
Speaking alongside other Molson Coors leaders, Hattersley laid out the five pillars of its Acceleration Plan.
“(The plan) refines our strategy,” he said. “It doesn’t overhaul it.”
Grow core power brand revenue Molson Coors plans to grow the net revenue of its core power brands, which have been gaining strength. In the U.S., core brands Coors Light, Miller Lite and Coors Banquet have combined to deliver revenue growth for several years, positioning them well for changing consumer purchasing behaviour, and core brands in other large global markets have been gaining strength, as well, including Molson brands in Canada, Carling in the U.K. and Ozujsko in Croatia.
Aggressively premiumize its portfolio. The company aims to continue premiumising its portfolio with the goal of its above-premium brands accounting for a third of global brand net revenue in the medium term. Major innovation successes like Madrí Excepcional in the U.K. and Simply Spiked in North America helped Molson Coors grow its above-premium net sales revenue mix from 23% in 2019 to 28% in 2022. It will eye new innovations, particularly in the Beyond Beer sector, to achieve these goals.
Scale and expand in Beyond Beer. Molson Coors’ Beyond Beer portfolio, which includes flavoured alcohol beverages, spirits and non-alcohol beverages, has been key to its premiumization efforts and is expected to continue to grow. The company expects Beyond Beer to drive about half of its above-premium net sales revenue growth over the medium term, on the back of flavour winners like Simply Spiked and Vizzy Hard Seltzer, whiskeys from Coors Spirits Co., energy drinks from ZOA, ciders in the U.K., and more.
Invest in its capabilities. Molson Coors plans to continue investing in its capabilities, including digital transformation, marketing effectiveness, sales execution and sustainability initiatives. The pledge follows a period of investment where, since 2019, it has increased its aluminum can production capacity, added a new U.S. variety packer and a new can line in Croatia, built a state-of-the-art brewery in Canada and embarked on a major modernisation project in Golden, Colo., while adding flavour production capabilities in the U.S., Canada and the U.K. Continued investments in these capabilities, as well as in sales and marketing, are expected to drive growth by increasing productivity and efficiency.
Support its people, communities, and planet. Molson Coors’ continues its commitment to its core values and sustainability platform, while investing in its employees and supporting communities where it operates globally.
Hattersley laid out Molson Coors’ long-term expectations, as well: The company foresees low-single-digit annual net sales revenue growth on a constant currency basis; mid-single-digit annual underlying income before income taxes growth on a constant currency basis; and annual high-single-digit underlying earnings per share growth.
And as Molson Coors turns its focus to growth, the company announced a $2 billion share repurchase plan with an expected term of five years, which is part of its balanced and cohesive capital allocation approach aimed to improve shareholder value.
“Supported by a strong balance sheet, that allows us to invest in our business and return cash to shareholders in new ways,” Hattersley said. “You can expect us to deliver, year after year, because we have proof that we can grow; we have the people to accelerate our growth, and we have the plans to accelerate our growth.”