Molson Coors set to discontinue 11 of its economy brands11 Aug 2021
In its most recent quarterly earnings call, beer titan Molson Coors announced that it will discontinue 11 of its value brands, some of which have strong regional loyalty. In total 100 SKUs will no longer be available.
The brands on the chopping block include Milwaukee’s Best Premium (the ice and light varieties of this brew will remain available), Mickey's Fine Malt Liquor Ice (the flagship Mickey’s product will not be discontinued), Henry Weinhard’s Private Reserve, Keystone Ice, Hamm’s Special Light, Keylightful (a fruity line extension of Keystone Light), Icehouse Edge, Magnum, Miller High Life Light, Steel Reserve 211 and Olde English HG 8000.
Pruning portfolios has become a popular move for Big Beer in recent years as the number of beer drinkers has continued to slump alongside sales volumes. Beer has fallen so low on the list of preferred beverages for consumers that a IWSR Drinks Market Analysis report found that from 2015 to 2020, U.S. beer consumption dropped 7.5%. Molson Coors, which has a large number of beer brands has experienced this trend first hand and has steadily been working to retool its offerings to be more in line with what modern consumers want.
According to the company’s CEO Gavin Hattersley, what today’s consumers want is premiumization. “So, the headline is simple premiumization is here to state Molson Coors. We're going to invest bigger behind our fast growing global hard seltzer portfolio and we are going to permanently streamline a smaller portfolio of legacy brands,” Hattersley explained on a July 29 earnings call. He continued to explain that significant premiumization of the company’s portfolio was due to growth in the U.S. hard seltzers market, in which the company doubled its share in the second quarter of this year. “So after an extensive analysis of our business, we are meaningfully streamlining and premiumizing our U.S. portfolio, discontinuing around 100 SKUs, including the elimination of 11 economy brands altogether,” he said.
It is clear that streamlining Molson Coors’ product offerings is not a new tactic for Hattersley who has been CEO since 2018. In fact, the ongoing trend away from beer has forced the CEO to look carefully at the company’s portfolio and steer it toward profitability. So far, he has proved to have a good sense for where to invest. In this quarter’s earnings report, Molson Coors showed a 17.4% increase in sales compared to the same time period a year ago.
Nevertheless, Hattersley is conscious that although the brands that are going to depart from the company portfolio are not ones that are significant to the bottom line, they are significant to consumers.
“Brands like Magnum and Mickey's are going to feel it when they are discontinued. So our local sales teams are partnering with distributors and retailers on a market-by-market basis on exit plans and to identify swaps that makes sense,” he said.
In tandem with axing these legacy brands, Molson Coors is continuing to put emphasis on developing and acquiring brands with better profit margins such as hard seltzers and non-alcoholic drinks like CBD infusions, energy drinks like Zoa and La Colombe RTD coffee.
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