In its 2021 second quarter fiscal earnings call with July 29 with analysts, beer giant Molson Coors shared details of its product portfolio strategy, which includes the sunsetting of 11 of the company's economy brands.
Chicago-based Molson Coors said the move comes as it has "premiumized" its portfolio and improved its margins as it looks to improve brewing efficiency and stabilize inventories of core brands.
"We intend to maintain that high level of premiumization service. So after an extensive analysis of our business, we are meaningfully streamlining and premiumizing our US portfolio, discontinuing around 100 SKUs, including the elimination of 11 economy brands altogether," company president & CEO Gavin Hattersley said in the call.
He added that the pruning of those brands will improve supply chain flexibility for the company's more profitable priority brands, enhance innovation efforts and resource allocation, and ensure dependable and on-time shipments to distributor.
Hattersley added that, while economy brands aren't typically a focus for investors, the company's distributors are going to feel the impact of their discontinuation. Molson Coors' local sales teams are partnering with distributors and retailers on a market-by-market basis on brand exit plans and to identify "swaps that make sense."
"So, the headline is simple premiumization is here to state Molson Coors," Hattersley said. "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. We are excited about the progress we're making and we're not about to stop now."
AdAge reported that the brands to be retired will include Milwaukee's Best Premium (except for ice and light varieties), Mickey's Fine Malt Liquor Ice, Keystone Ice, Keylightful, Hamm's Special Light, Henry Weinhard's Private Reserve, Icehouse Edge, Magnum, Miller High Life Light, Steele Reserve 211 and Olde English HG 8000.
Molson Coors Q2 net revenue of $3.56 million increased 17.4 percent year-over-year and 13.7 percent in constant currency. Net sales revenue per hectoliter increased 5.0 percent year-over-year on a brand volume basis. The company's Q2 net profit was $389 million, while EBITDA of $698 million fell 1.3 percent in constant currency.
