Bud Light aids Molson Coors in achieving record quarter

Bud Light aids Molson Coors in achieving record quarter

Beer Battle: Molson Coors Strikes Back

Capitalizing on the brewer’s missteps over its controversial promotion with a transgender influencer in April, rival Molson Coors is making significant gains in the beer market. In fact, the company just reported its single best quarter of net revenue since the merger of Molson and Coors back in 2005.

Molson Coors’ CEO, Gavin Hattersley, couldn’t help but take a swipe at his largest competitor, Anheuser-Busch (AB), during an investor call. He stated, “We didn’t plan on our largest competitor’s largest brand declining in volume by nearly 30% in the quarter.” Hattersley has reason to celebrate as a year ago, AB’s Bud Light was more popular than Molson Coors’ Coors Light and Miller Lite brands combined. But now, the rival duo is 50% bigger than Bud Light. The outlook for Molson Coors is looking increasingly rosy.

The impact of this “seismic shift” in the U.S. market has had an outsized impact on the industry, and Molson Coors now expects global underlying income before tax to grow by 23%-26% this year, significantly higher than their previous expectation of low single-digit growth. The company also issued a more bullish forecast for sales and cash flow.

Despite the volatile market conditions, Molson Coors’ brands have shown no signs of slowing down. In fact, the company’s U.S. breweries experienced their highest levels of production in May and June since 2019. Hattersley confidently stated, “We haven’t seen any slowdown in momentum for our brands.”

As if that wasn’t enough bad news for Anheuser-Busch, their attempts to end the boycott of Bud Light through price reductions during the summer holidays failed to make a dent in the demand for Coors Light and Miller Lite. Hattersley made it clear, saying, “it’s important to note that the competitive pricing moves around Memorial Day and Fourth of July did not appear to have a negative impact on our brands, as our share gains continued.”

But Molson Coors is not stopping there. The company’s CEO also confirmed recent suspicions that beer retailers are reallocating shelf space, moving away from Bud Light. This structural change is expected to result in a sustained loss in market share for Anheuser-Busch. Hattersley recognizes this opportunity and is committed to spending an additional $100 million in marketing to further steal market share from his competitor. Anheuser-Busch, on the other hand, is already reducing its workforce, even as it invests in an expensive new promotional campaign.

Hattersley is cautiously optimistic about Molson Coors’ ability to retain Bud Light’s market share. He intends to provide a clearer picture of the company’s long-term future at the upcoming strategy day in New York City on October 3rd. Reflecting on unexpected shifts in consumer behavior that began in the second quarter, Molson Coors’ Chief Financial Officer, Tracey Joubert, added, “We could not have foreseen the shifts in consumer behavior that began in the second quarter.”

In essence, Molson Coors is capitalizing on the missteps of its largest competitor and experiencing significant growth. With a more positive outlook, increased revenue, and successful marketing strategies, the company is poised to continue its trajectory of success in the beer market. Meanwhile, Anheuser-Busch is facing challenges as it tries to regain market share in the face of fierce competition. It remains to be seen how this battle will unfold, but for now, Molson Coors is enjoying the sweet taste of victory.