Dive Brief:
- Molson Coors reported a 0.8% decrease in global beer volumes and 1.9% decline in net sales on a reported basis to $986.2 million Tuesday, though that dip was less than analysts predicted.
- Quarterly profit dropped to $172.3 million, or 80 cents per share, from $229 million, or $1.23 per share, in the same period last year. Profits were impacted by lower global volumes, increased brand investments and currency headwinds.
- Molson Coors has also made "substantial progress" on its pending $12 billion purchase of SABMiller's stake in their MillerCoors joint venture, which the company plans to close before the end of 2016, Molson Coors president and CEO Mark Hunter said in a statement.
Dive Insight:
While all eyes may currently be on AB InBev and SABMiller, their merger significantly impacts Molson Coors, which will become the second-largest brewer in the U.S. with a 25% market share, and the third-largest in the world. The transaction will also double the company's revenue and profitability.
Hunter called the company's purchase of the remaining MillerCoors stake a "game-changing transaction" that will "simplify decision-making and reduce the complexities of dual ownership," while enabling Molson Coors to "become a more integrated and efficient brewer" and "a more effective competitor as a single owner, promoting consumer choice in an increasingly diverse and fast-growing brewing industry."
Molson Coors will not only have full ownership over major MillerCoors brands, such as Miller Lite, Miller High Life and Blue Moon, but also the craft brewers and other alcoholic beverage segments MillerCoors has pursued in recent years.
That most recently includes reaching agreements to acquire a majority stake in Hop Valley Brewing this week and a majority stake in Terrapin Beer Company last week under MillerCoors' Tenth and Blake craft and import division. MillerCoors also announced this week a nationwide expansion of its Henry’s Hard Soda line with the debut of Henry’s Hard Cherry Cola.
Diversification aside, Molson Coors' volumes of Coors Light increased 4.1% worldwide for the quarter, including low single-digits in the U.S. and strong double-digit growth in Europe and Latin America. That beats the 3.5% increase in global volumes the brand reported last quarter and is a bright spot in an otherwise difficult time for many light beer brands from major brewers.