Molson Coors Beverage Company today said it posted top- and bottom-line growth in its fiscal third quarter, buoyed by strength of Coors Light in the U.S., momentum in Europe and Canada, and continued expansion of its global above-premium portfolio.
The company said third-quarter net sales revenue rose to $2.82 billion, up 2.5% compared with the year-ago quarter. Net income jumped 32.1% to $453 million, or $2.08 per diluted share, up from $342.8 million, or $1.58 per share, in the third quarter of 2020.
Molson Coors reaffirmed its key financial guidance for the full year.
“Twenty-four months ago, we announced a revitalization plan to put Molson Coors on track to deliver sustainable top- and bottom-line growth, and we continue to make meaningful progress towards that goal,” said Molson Coors CEO Gavin Hattersley. “I remain confident that we are on track to deliver our full-year key financial guidance for 2021.”
The gains came despite a raft of global supply chain issues and significant inflation, which resulted in soaring prices for transportation and key raw materials. Those pressures are expected to persist in the months ahead.
“Fuel prices are up. Truckers are in short supply around the world, and freight costs are up too,” Hattersley told analysts and investors today on the company’s earnings conference call.
And while Molson Coors has taken significant steps to reduce the effect of the supply chain tightness – including inking long-term contracts with carriers, hedging programs and shifting more of its products to rail – “inflation will continue to be a pressure point for us and for just about every other company,” he said.
That resulted in lower shipments during the quarter than the company projected, but the tide is beginning to turn, Hattersley said. So far in the fourth quarter, shipments are up to nearly 1 million barrels a week in the U.S., Molson Coors’ largest market, helping boost distributor inventories by more than 10% heading into the key holiday season.
In Canada, Molson Coors improved its national share of the beer market for eight straight months, leading to total share growth in the third quarter — the best share-trend improvement in at least six years.
In the U.K., meanwhile, net sales revenue in the on-premise – by far the biggest channel for Molson Coors in Britain – has rebounded to 2019 levels, and margins surpassed 2019 levels.
Molson Coors plans to spend more on marketing in the fourth quarter than in the same quarter of 2019 to continue that momentum, supporting its big-bet brands in North America and Europe, said Molson Coors Chief Financial Officer Tracey Joubert.
“To be sure, we have faced challenges in the quarter, but we are proud of our agility and the actions we have taken to manage through them,” Joubert said. “The fundamentals of our business remain strong, and we are confident we are on the right path toward long-term sustainable … growth.”
Coors Light on a roll
Molson Coors’ largest brand, Coors Light, is growing share of total beer in the United States for the first time in more than five years.
Its strong performance in the third quarter, aided by the continued success of its “Made to Chill” campaign, was fueled by increased marketing investment, Hattersley said.
The company plans to continue robust marketing support for the brand into and beyond the fourth quarter.
The brand also is showing momentum in Latin America. In Puerto Rico, for instance, Coors Light is growing for the first time in 15 years.
Above-premium portfolio shines
During the quarter, Molson Coors said its global portfolio of above-premium beverages, including brands such as Vizzy, Topo Chico Hard Seltzer, Blue Moon, Madrí Excepcional and Praha, eclipsed 25% of total brand volume net sales revenue.
This so-called premiumization of the company’s portfolio, a key goal of its revitalization plan, is helping drive profitability.
In the U.S., the company has grown share of the above-premium segment for two consecutive quarters for the first time in more than five years.
That growth is largely tied to its continued success in hard seltzers. While the segment is showing signs of flattening and leading brands are mired in declines, Molson Coors continues to gain share with the fastest-growing hard seltzer portfolio in the U.S.
Vizzy brand volumes surged 50% in the third quarter to become the No. 4-selling hard seltzer in the country, per IRI data. Topo Chico Hard Seltzer, meanwhile, holds the No. 3 slot among new items released in 2021 in the general malt beverages category and holds a 2.4 share of the market despite being sold in just 16 markets, per IRI.
In the U.S., Peroni also is up double-digits, outpacing all other European imports. Blue Moon Belgian White is up high single digits. And Blue Moon LightSky continues to post double-digit growth.
In Canada, Hattersley said, Vizzy and Coors Seltzer have corralled “strong market share” with early returns exceeding expectations.
Non-alc on the rise
Two years after changing its name to Molson Coors Beverage Company to reflect its new focus on moving beyond the beer aisle, Molson Coors said it sold nearly 2 million cases of non-alcohol beverages during the first nine months of 2021, marking progress toward its ambition of reaching $1 billion in revenue by 2023.
Leading the way is ZOA, the No. 1 new energy franchise in 2021 that’s elbowed its way into the Top 20 brands in the space, IRI data show. Molson Coors now has secured more than 115,000 points of distribution for the brand, with “more coming online every day,” Hattersley said.
Molson Coors’ partnership with La Colombe on its ready-to-drink line of coffees also is picking up steam. Early success with distribution in large, national retailers has allowed the company to unlock national distribution of La Colombe products in grocery and other chain stores for early 2022.
“Growing beyond the beer aisle is no longer an aspiration,” Hattersley said. “We’re doing it.”