Molson Coors Beverage Co. (TAP) saw its stock price rise by 0.9% in premarket trading after reporting impressive Q1 results. The beer maker attributed the growth to increased market pricing, a rising sales mix, and higher demand in the US and European markets. For the first quarter of 2021, Molson Coors reported a net income of $72.5 million, or 33 cents per share, down from $151.5 million, or 70 cents per share, in the year-ago quarter. However, the company’s adjusted profit grew by 82.3% to $116.3 million, or 54 cents a share, surpassing the Wall Street analyst’s estimate of 26 cents per share, according to FactSet data. Revenue increased by 5.9% to $2.35 billion, ahead of the analyst view of $2.23 billion.
Pouring Growth into Europe, US
Molson Coors continues to anticipate net sales revenue growth in the mid-single-digit percentage range for 2021. The company’s revised outlook comes amid overall growth for the beer sector, particularly in Europe and the US, driven by relaxed restrictions in some areas and increased adoption of digital platforms for alcohol deliveries.
In its Q1 report, Molson Coors highlighted a 6% growth in domestic net revenue per hectoliter on a brand volume basis within the US. In Europe, the brewer recorded a 3.4% growth in net sales revenue and a 4.2% growth in net sales revenue per hectoliter on a brand volume basis. These positive results were driven by higher consumer demand and a favorable mix in the US and Europe.
Acquiring New Brands, Innovation
During the quarter, Molson Coors continued to boost its product innovation efforts, diversifying its portfolio in response to changing consumer tastes and preferences. The company recently introduced new products such as the Hard Mountain Dew, a flavored malt beverage, in collaboration with PepsiCo.
Additionally, in the non-alcoholic segment, the company expanded its offerings, launching ZOA Energy, a plant-based energy drink, in partnership with actor and entrepreneur Dwayne Johnson. This move is in line with Molson Coors’ strategy to evolve its portfolio to suit the growing preference among consumers for healthier, fitness-conscious beverages.
Molson Coors also made recent acquisitions, signing a deal with Coca-Cola to manufacture and distribute Topo Chico Hard Seltzer in the US. The beverage, already popular in Latin America, is the first hard seltzer brand introduced by the company in the US, broadening its product reach in the rapidly growing hard seltzer market.
Sustainable and Digital Commitments
Molson Coors has made sustainability a central part of its business model. The company is on track to reach its 2025 sustainability targets, which include reducing water use by 22%, carbon emissions by 50%, and waste in landfills by 80%. The brewer revealed it had already reduced 1.8 million metric tons of CO2 emissions across its value chain since 2008.
Moreover, Molson Coors is embracing digital transformation, upping its investments in e-commerce and digital marketing solutions to meet current and future consumer needs. This shift to digital channels follows global change in the way consumers search, find and purchase goods, services and experiences.
This year, Molson Coors announced a strategic partnership with online alcohol delivery platform Drizly, making its products available for online purchase directly from the Drizly platform. This partnership allows Molson Coors to reach an extended audience, digitally savvy consumers who prefer purchasing beverages from the convenience of their homes, and does not rely only on traditional in-store sales.
Efforts in Consumer Experience
Molson Coors endeavors to improve consumer experience by leveraging technology and focusing on product quality through continuous research and development. During the first quarter, the company gathered valuable insights, identifying a 19% increase in consumers who cited “quality” as the reason for purchasing Molson Coors beverages compared to last year. This data supports the company’s continued emphasis on the quality of its products and improving customer satisfaction.
Looking ahead, Molson Coors is focusing on its commitment to sustainability, continued innovation of products, digital investment, and excellence in its core brands. The company is embracing a forward-looking approach, adapting to the evolving market landscape, and expanding its reach to satisfy the growing consumer demand.
Overall, Molson Coors is poised to maintain and even accelerate its upward trajectory, as the company continues to make strides towards net sales revenue growth by harnessing the potential of digital platforms and product innovation in response to consumer needs. Bolstered by impressive Q1 results, the strong start of 2021 is a testament to Molson Coors’ ability to adapt and thrive in a rapidly changing market.
