After a bounce-back year in 2021 in which Molson Coors made significant progress on its two-year-old revitalization plan, CEO Gavin Hattersley says the company is primed to accelerate into 2022.
The foundation Molson Coors laid in 2021 — which included massive investments to boost its physical and digital capabilities, a return to sales revenue growth for its two biggest brands through the third quarter and a sizable boost to its above-premium business helped by hard seltzers, non-alc beverages and other drinks beyond the beer aisle — has Hattersley optimistic for the year ahead.
We sat down with him just before the holidays to talk about the year that was in 2021 and what’s ahead in 2022.
The conversation below has been lightly edited and condensed.
Q: As Molson Coors enters Year 3 of its revitalization plan, what are some of the biggest highlights of what the company has accomplished?
A: The last two years we’ve made tremendous progress on our revitalization plan. We’ve laid the foundation to accelerate our growth this year. If you look at the highlights of the first two years, what stands out to me is the health of Coors Light and Miller Lite. The fact that both grew the top line through the third quarter and at the same time is a testament to the work of our team.
We’ve made tremendous inroads in the hard seltzer space. We’ve gone from practically zero share at the beginning of the revitalization plan to where we are today, which is tremendous growth that has allowed us to pick up a big slice of the market.
And then in our Beyond Beer and Emerging Growth space, we’ve done a number of deals, which are very, very exciting. We’ve unlocked new channels for both ZOA and La Colombe, which are going to give us a real opportunity. I think ZOA, in particular, has tremendous growth potential. The sky’s the limit with that brand.
Q: Let’s dig in a little on Coors Light and Miller Lite. How would you characterize their position right now and how can Molson Coors build on that for 2022?
A: Both of those brands grew revenue through the third quarter of 2021, and I can’t remember the last time they did so together. The thing that’s most impressive about those brands is the consistency of our messaging. It’s resonating with consumers, with retailers and our distributors. We’ve got a tremendous foundation for both of them to really step change in 2022.
Coors Light’s “Made to Chill” campaign has been a resounding success and wonderfully executed. The team has plans to drive that campaign to the next level in 2022.
Miller Lite adapted so well at the beginning of the pandemic, and it has an extraordinary foundation to build off in 2022, starting with its J Balvin campaign.
Q: Let’s talk about the hard seltzer portfolio. Vizzy is now the No. 4 hard seltzer in the U.S., per IRI data, and Topo Chico Hard Seltzer exploded out of the gates and expands nationally this year. And you’re making plays in Canada and Europe.
A: Both of those brands are growing strong double digits (per IRI) and they’re the two brands in the seltzer space of any meaningful size that have tremendous momentum behind them. They have captured a significant share of the market already. Topo Chico Hard Seltzer has the potential to, we believe, become the No. 3 hard seltzer brand in the country. And with the plans we’ve got in place and the innovation on the way, we’ve got an awesome foundation and a springboard into 2022.
In Canada, Vizzy and Coors Seltzer have gotten to double digits (in market share). We’re launching Topo Chico Hard Seltzer later this year as well, which will provide even more growth. And in Europe, we’ve got real growth opportunities with hard seltzer. We are a first mover in seltzer space, particularly in Central and Eastern Europe with the Wai Moment brand.
Q: Speaking of Europe and Canada, both regions turned in successful years in 2021. What drove performance?
A: Canada had a tremendous 2021, the result of the team there working really hard over the years to right the ship and change the shape of their portfolio and drive share. The turnaround was on the back of Coors Light, the seltzer portfolio and strength in craft. So the fact that business started to grow share again in 2021 (per Beer Canada) is a real testament to work and effort of that team.
Europe led the way for us from an overall company point of view in the above-premium space, and 2021 was no exception. We’ve launched a brand called Madrí Excepcional. We’ve launched Pravha. Both of those brands have had really good initial success. And we plan to double down on both of those brands in 2022. We’ve got real growth opportunities with the hard seltzer space. I think we’re positioned for a strong recovery as we’ve all gotten better equipped to navigate the pandemic.
Q: The above-premium beer business in the U.S. also had a solid year. What happened there?
A: The on-premise reopening certainly helped. Peroni had a great year. The Blue Moon family rebounded nicely in 2021 as the on-premise picked up again after pandemic-related closures. The franchise got back to growth through the third quarter, which is very encouraging. The new innovation we’ve got coming with Blue Moon LightSky gives us another tool to drive that franchise even further into positive territory.
Leinenkugel’s Summer Shandy also bounced back in a big way, and we’ve got opportunities to build on that in 2022. Our regional craft portfolio remains a priority for us, and I’m excited about year 2 of our national expansion of Hop Valley.
Q: Molson Coors invested millions in its capabilities this year across the globe. What are the big highlights?
A: Investing in capabilities is one of the key pillars of our revitalization plan. And we’ve done that in spades in 2021 and in 2020, frankly. We invested significant capital behind the seltzer space with investments in seltzer capability in all of our big markets. We’ve invested a lot more behind digital and social media space, which needs to be a core competence of ours. It was always in the plan to do that, but we’ve actually accelerated our investment given what happened with the pandemic. And we’ll plan to double down in that space going forward.
Q: That’s a lot. You’re almost off the hook. How would you sum up 2021 and what it portends for 2022?
A: The revitalization plan has one overarching goal, and that is to drive top-line revenue growth and bottom-line profit at the same time. And the foundation that we’ve laid over the last two years sets us up to do exactly that in the years ahead. I believe absolutely that revitalization plan is the right strategy for our business.
We’ve spent the last two years laying the groundwork for us to really make a step change in 2022. And I believe we’ve got the distributors, we’ve got the retail partners, and we’ve got the employees to do exactly that. I have a high degree of confidence that our network, both internal and external, will once again deliver in 2022. It’s going to be a big year.