Molson Coors Value Portfolio: 5th Largest Beer Company in America

Taken all by itself, Molson Coors Beverage Co.'s value portfolio – Miller High Life, Keystone and Keystone Light – would be the 5th largest beer company in America CEO Rahul Goyal told the Barclays Consumer Goods Conference.

He and CFO Tracey Joubert explained why Molson Coors is focusing on its value portfolio, aside from the simple issue of size. First, consumers are looking for brands that mean something but at a price point that is reasonable. Second, that share can mean profit, Joubert explained.

Historically, Molson Coors never talked about value as a business, as a brand, "and a lot of our share losses was around the value portfolio." In the last six months, the company has made progress on reducing those share losses on value with innovations such as the innovation of Keystone Apple and the focus on High Life. "We've had some success" in the first and second quarters.

The value portfolio is just a part of the entire Molson Coors business, but it is an important aspect both in terms of the consumer and in the context of making sure the business is strong and healthy.

Marketing the value brands is not about heavy national investment but rather a focused local investment in Keystone, Miller High Life or a regional value brand that can generate the return neededto support profitable growth, not just delivering volume.

Goyal explained the philosophy. "Value is a couple of things. One, making sure some of these brands are very regional. How the company spends and engages with these brands and the consumer has to be very local. It's not about driving volume for the sake of volume. We're not discounting it. We're not giving it away for free." It's about building the trademark building the brand behind the trademark.

Innovation and value are levers, he said. "This is not about being on national TV and in sports. This is about where there are relevant consumers looking for that type of proposition." As an example, he pointed to Miller High Life, which launched in 18 to 22 states, not 50. "It made sense in those states," he said.

Beyond Beer Nears 10% of Sales

Molson Coors Beyond Beer brand account for almost 10% of sales and include ready-to-drink cocktails, hard seltzers, flavored malt beverages, spirits and non-alcoholic drinks.

How does Molson Coors think about these brands? Goyal used FeverTree as an example. "It drinks like alcohol, it's sold like alcohol, but it's not alcohol. So it's really within our capabilities."

That's not to say the transition has been without hiccups. The business model involves online, direct to store delivery (DSD), istributor sales representatives (DSR). "We've neveer done these things before, so definitely learnings for us in terms of integrating the business. But the distributors are transitioning to become Total Beverage."