Molson Coors is to lean harder into “emerging consumer tastes in flavour and beyond beer”, following another quarter of declining sales, volumes and profits.
The Coors brand owner reported a 3.6% decline in organic net sales in the three months to 30 June, to $3.1bn. Branded volumes, meanwhile, slid 4.8%.
For the half year, Molson Coors sales fell 2.1% organically, with the most recent quarter marking a reversal in fortunes to Q1, when sales climbed by 0.1%.
Underlying operating profits, meanwhile, fell sharply by 27.8% in constant currency across the quarter, and 19% for the half-year. The decline was attributed to “lower financial volume, cost inflation related to materials, logistics and manufacturing expenses”, Molson Coors said.
Macroeconomic headwinds had affected “both consumer behaviour and key input costs” across the quarter, said Molson Coors CEO Rahul Goyal. “We’re focused on improving our overall share performance in this competitive environment through ongoing, disciplined execution.”
Molson Coors has sought to diversify beyond beer amid declining consumption in the US and other key markets in recent years. Last January, the brewer paid £71m for an 8.5% stake in UK-based soft drinks brand Fever-Tree.
In March, it swooped for leading US-based canned cocktail brand Monaco Cocktails.
“As we lean into emerging consumer tastes in flavour and beyond beer, we’re encouraged by Fever-Tree’s continued momentum after more than a year of partnership,” said Goyal. “Monaco Cocktails delivered strong performance in its first quarter as part of Molson Coors.”
The Madrí brewer has also looked to cut costs to the tune of $450m via a three-year cost savings programme.
“Our approach for the balance of the year includes prudent investments designed to drive scale and efficiency across our global portfolio while executing against our cost savings plan to mitigate the impacts of persistent macroeconomic volatility,” Goyal added.
Molson Coors reaffirmed its guidance for the full year, stating it expected organic sales to be between flat and –1%. Operating profits, meanwhile, are expected to fall between 15%-18% on a constant currency basis.
Last year, Molson Coors booked a 4.8% decline in organic sales and a 5.4% fall in branded volumes. Organic operating profits fell by 13.8%.
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