MONTREAL — Molson Coors Beverage Co. delivered its best revenue growth in more than a decade on Thursday, less than two years after ushering in a revitalization plan aimed at investing in its core brands, increasing its premium offerings and expanding beyond the beer aisle.
The Colorado and Montreal-based company posted a second quarter net income of US$388.6 million, nearly doubling its US$195 million earnings a year earlier and handily surpassing analysts' expectations.
Molson Coors CEO Gavin Hattersley said the strong top line growth is an indictor of what's to come for the multinational drink and brewing company.
"Nearly two years ago we laid out the Molson Coors revitalization plan, a multi-year strategy to deliver the sustainable top line growth that has eluded our business for many years," he said during a conference call with analysts. "Today we can talk meaningfully about the outcomes from the revitalization plan."
The company's success comes from its diverse brand mix in the United States, significant "premiumization" of the Molson Coors portfolio and its growth beyond beer, especially with its hard seltzer segment, Hattersley said.
Above premium brand volumes reached a record-high portion of the company's U.S. portfolio compared to any prior quarter since the creation of the MillerCoors joint venture in 2008 and a record-high portion of its European portfolio, the company said.
In Canada, Molson Coors said it is quadrupling production of hard seltzer, a popular alcoholic beverage that usually contains carbonated water, alcohol and fruit flavourings.
The company has cornered a growing portion of the hard seltzer market in Canada through its Vizzy and Coors hard seltzers.
"Vizzy specifically has earned the No. 1 spot in the on premise (beverage market) in key regions like Ontario," Hattersley told analysts. "We’re looking forward to fuel this momentum with Vizzy lemonade, which launched in Canada just a few weeks ago."
The company's chief financial officer Tracey Joubert said Molson Coors has reached the point where its investments made through the revitalization plan are now delivering results.
"We plan to put our foot even more firmly on the gas pedal as we drive towards sustainable top- and bottom-line growth for this business.”
Meanwhile, the company is also expanding in emerging markets, with its volumes sold in Latin America growing by triple digits in the quarter.
Molson Coors also said its non-alcoholic brands like Zoa have already surpassed expectations for the entire year.
Yet the company also managed to grow its staple beer brands Miller Lite and Coors Light, something Hattersley said hasn't happened often in the last 15 years.
"During the pandemic, we did see increased demand for large trusted brands," he said. "This is particularly true in the on-premise (market). Many on-premise owners are sticking to faster moving brands and this obviously benefits brands like Miller Lite and Coors Light ... and we are seeing that trend stick as we settle into a sort of new normal."
This report by The Canadian Press was first published July 29, 2021.
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