😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

Molson Coors Sees Consumers Choose Between Premium and Cheap Beer

Published 08/02/2022, 03:46 PM
Updated 08/02/2022, 03:52 PM
© Reuters.
TAP
-
SAM
-
BUD
-

By Liz Moyer

Investing.com -- Now, inflation is eating into consumers’ beer money.

Molson Coors Brewing Co (NYSE:TAP) said it saw softening beer sales in the second quarter and noticed some customers were making a tradeoff, buying lower-priced brands instead of the premium labels they used to buy. Molson shares dropped 10% on Tuesday.

The observation backs a finding last month by The Wall Street Journal: that consumers were buying more economy beer at the checkout line in recent weeks.

The report cited analysis by beer-industry consultant Bump Williams that retail store sales of economy beer rose 5.4% in the four weeks ended July 2 compared to last year. June’s inflation data showed a 9.1% jump in prices from last year.

At Molson, U.S. sales volume dipped 1.7% in the quarter, Molson’s CEO Gavin Hattersley told CNBC. But there was growth for more expensive brands such as Peroni and Blue Moon as well as for lower-priced Miller High Life. 

Molson has stuck with some of its lower-priced brands, though it has cut back on them. But being in both spaces could serve Molson well “as we’re heading into what’s clearly going to be tough times,” Hattersley said.

Anheuser Busch Inbev (NYSE:BUD), the biggest U.S. brewer, also saw lower volumes in North America for the second quarter, which it reported last month. Shares fell 1.9% on Tuesday.

Sales to retailers fell 3.4% in the U.S. The maker of Budweiser has been putting energy into building its Michelob Ultra brand and its canned cocktails sold under the brand Cutwater.

Boston Beer Company Inc (NYSE:SAM), maker of Samuel Adams and Truly Hard Seltzer, recently slashed its outlook for full-year earnings, citing an ongoing drop in sales of hard seltzer. Its shares fell 2.6% on Tuesday.

Like other brewers, Boston Beer has raised prices since last year and expects that to continue, setting guidance last month for 3% to 5% price increases through the end of 2022.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.