MillerCoors releases Q3 results
Coors Light, Miller Lite gain market share in premium light beer segment
London-based SABMiller plc and Denver-based Molson Coors Brewing Co. reported that MillerCoors, a Chicago-based joint venture, experienced a net income decline of 8.6 percent to $344.4 million for the third quarter compared with the same period last year. The decline was driven by lower volume and increased marketing investment, partially offset by lower cost of sales, positive sales mix and net pricing growth, it says.
For the second consecutive quarter, Coors Light and Miller Lite both gained market share of the premium light beer segment, with Miller Lite achieving volume growth. Combined, Coors Light and Miller Lite delivered their best quarterly performance in three years, it reports.
“As we relentlessly pursue total portfolio growth, job number one is taking share and growing our American Light Lagers. This past quarter, we took a step in this direction by taking segment share with both Coors Light and Miller Lite,” said Gavin Hattersley, MillerCoors chief executive officer, in a statement. “We have a lot of work ahead of us to address our economy segment performance, but all other segments across our portfolio are in good shape as we close out the year. Net income was down this quarter due to lower volume, partially due to bringing distributor inventories down as anticipated coming out of peak-selling season, and increased media investments across our brands.”
Miller Lite sales-to-retail (STR) increased low-single digits and, citing New York-based Nielsen, gained share of the premium light segment in the third quarter, the company says. Earlier this year, the brand launched a new advertising campaign titled “Bodega,” designed to further leverage Miller Lite’s perspective that people stay connected to who they really are, just as the brand has reconnected with its true self. The brand has gained momentum since returning to its original white packaging and is further celebrating its history and heritage by releasing the original Steinie bottle from 1975, it adds. The shorter neck bottle is now available for a limited time, with production set to end at the close of the year.
Coors Light experienced decline in low-single digits, but gained share of the premium light beer segment in the third quarter. Coors Light continued to execute its brand overhaul with the continued rollout of a contemporary and new visual identity across all packages, while 72andSunny was announced as the new advertising and digital agency of record for the Coors family of brands.
Its above-premium beer portfolio was down low-single digits this quarter with the strategic de-prioritization of Miller Fortune, while the portfolio was up low-single digits excluding Fortune. The Redd’s franchise achieved mid-single digit growth, driven by Redd’s Wicked brands, including the 2015 introduction of Redd’s Wicked Mango.
The MillerCoors Tenth & Blake portfolio grew low-single digits. The Blue Moon Brewing Co. grew low-single digits, driven by Blue Moon Belgian White’s 80th consecutive quarter of growth and the release of Blue Moon White IPA, which is the No. 4 new craft offering in 2015, according to Nielsen. The Jacob Leinenkugel Brewing Co. grew low-single digits, driven by the continued growth of its Shandy portfolio, and its newest varietals, Harvest Patch Shandy and Grapefruit Shandy. According to Nielsen, Grapefruit Shandy is the No. 1 new craft offering in 2015. MillerCoors also announced the acquisition of San Diego’s Saint Archer Brewing Co., a fast-growing craft brewer with a portfolio currently available only in California.
In the premium regular beer segment, Coors Banquet grew low-single digits in the third quarter and is in the midst of its ninth consecutive year of growth. According to Nielsen, Coors Banquet remains the only national premium regular beer brand that is growing due to its continued success with the “stubby” heritage bottle, led by 12-packs and 18-packs nationwide. The growth from Banquet partially offset a double-digit decline for Miller Genuine Draft.
Consistent with the overall industry trend that has seen declines in economy brands, the MillerCoors below-premium beer portfolio decreased mid-single digits, driven by a double-digit decline of Milwaukee’s Best and a high-single digit decline of Keystone Light, while Miller High Life declined mid-single digits. Steel Reserve grew low-single digits, due to the continuing success of the Steel Reserve Alloy Series, the brand’s line of flavored malt beverages.