Molson Coors reports third quarter 2024 earnings, announces majority stake in ZOA Energy

On Molson Coors’ Q3 earnings call, CEO Gavin Hattersley expressed confidence in the company’s long-term strategy while shedding light on the drivers that contributed to its third-quarter results. 

Across each part of Molson Coors’ strategic plan – which emphasizes a strong core business, aggressive premiumization, expansion beyond beer and investment in best-in-class capabilities – Hattersley pointed to progress and near-term actions designed to unlock future growth, including the company’s decision to take a majority stake in the better-for-you energy drink brand, ZOA, announced. 

“Collectively, our global core power brands are healthier than they’ve been in years, [and] we’re changing the shape of our global portfolio with premiumization successes in EMEA and APAC, Canada, and targeted plans for the US,” Hattersley said.  

“We’ve [also] built capabilities across our organization that support premiumization and focused innovation, supply chain efficiencies and commercial effectiveness, all of which should help drive sustained, long-term profitable growth.”  

Molson Coors reaffirmed its 2024 underlying pretax guidance of mid-single digit growth despite a challenging macro environment and reaffirmed its underlying diluted earnings per share guidance of mid-single-digit growth but narrowed such guidance to the higher end of the range, while adjusting top-line guidance to down approximately 1% from up low single digits previously. 

CFO Tracey Joubert added that Molson Coors is a “highly cash-generative business,” with “$856 million in Underlying Free Cash Flow in the first nine months of this year.”  

Joubert also reiterated the belief that Molson Coors is on the right path.  

“Looking ahead, we remain confident in our business, our strategy, and our long-term growth algorithm,” she said. 

Near-term actions with long-term upside 

During the call, Hattersley described the impact – and expected future benefit – of Molson Coors’ decision to exit a large, lower-margin contract brewing agreement.  

“We knew we had a headwind for this year from the exit of Pabst contract brewing volume,” he said, later adding that “excluding the impact of our contract brewing revenue declines, our annual top-line projected growth is expected to be positive.” 

Both Hattersley and Joubert cited other examples of decisions the company has made with an eye on long-term growth, like onshoring production of Peroni and investing hundreds of millions of dollars to modernize its Golden, CO brewery, the sole production site for the rapidly growing Coors Banquet brand. 

Emphasizing a resilient core and global premiumization 

Hattersley also noted that the company’s U.S. core power brands of Coors Light, Miller Lite and Coors Banquet showed resiliency against a tough industry backdrop. The brands cycled tough comparisons versus the prior year but were up nearly 2 share points in Q3 2024 vs. Q3 2022 per Circana. 

He also commended the success of European core brands Ozujsko and Caraiman and dug further into EMEA & APAC when it came to premiumization, citing the growth of Madri Excepcional while calling the region an “excellent” example of Molson Coors’ ability to achieve its ambitions. 

Meanwhile, the call revealed another set of successes in Molson Coors’ Canadian business, which has grown industry share for 19 straight months according to Beer Canada. Despite industry trends similar to those in the U.S., Molson Coors is the only major brewer growing share of both beer and RTDs in Canada. 

The region also grew Above Premium net brand revenue by nearly 15 percent in the quarter, according to internal data. That’s on the back of brands like Miller Lite, which is the fastest-growing beer brand in the country, according to Beer Canada. Thanks to flavor brands like Coors Seltzer and Simply Spiked, the company growing more share of flavor than any other major brewer in Canada. Mirroring this growth in the U.S. will take work, Hattersley said, referencing the company’s focused plans and willingness to make difficult choices when needed, such as selling its underperforming craft breweries in August of 2024. 

More on M&A: Molson Coors announces majority stake in ZOA Energy 

Aligned with its premiumization plans beyond the beer aisle, Molson Coors also announced this morning that it will take a majority stake in ZOA, the better-for-you energy brand co-founded by Dwayne “The Rock” Johnson, Dany Garcia, Dave Rienzi and John Shulman.  

As the better-for-you energy drink segment has driven 100% of the category growth, year-to-date, the move signals Molson Coors’ belief in ZOA’s growth potential. It also follows a period of foundational initiatives, including new packaging, a new visual identity and ZOA’s first national marketing campaign featuring A-list co-founder, Dwayne “The Rock” Johnson. 

The move allows Molson Coors to lead ZOA’s marketing, retail and direct-to-consumer sales and development, which Chief Commercial Officer Michelle St. Jacques says positions ZOA and the portfolio for future growth. 

“We’re building a winning portfolio that offers consumers choices across a wide range of occasions, and non-alc is a key part of that strategy,” said Molson Coors Chief Commercial Officer Michelle St. Jacques. “ZOA opens the door for us to participate in more parts of the day and incremental opportunities beyond our core business. We’ve built a strong foundation with ZOA over the past three years and we see a lot of opportunity for this brand to achieve its next stage of growth and scale.”   

Adding to Molson Coors’ confidence are ZOA’s repeat purchase rates of 50% and its ability to attract new consumers to the energy category, with 30% of ZOA buyers new to this space. The brand’s direct-to-consumer business is also a significant driver of sales and consumer visibility, including the brand’s position as a top 10 energy drink brand on Amazon. 

Conclusion 

With strong core brands, growing businesses and premiumization successes in Canada, EMEA and APAC, and strong plans to premiumize and bolster its non-alc business in the Americas, Hattersley believes Molson Coors has set itself up for future success.  

“We are confident we have the right strategy to achieve our long-term growth objectives,” said Hattersley. “We have substantially improved our financial flexibility allowing us to continue to advance our strategy by investing in our business as well as returning cash to shareholders. We are pleased with our progress and our ability to capitalize on the opportunities ahead.” 

This article contains forward-looking statements within the meaning of the U.S. federal securities laws – please click here for the full Molson Coors’ forward-looking statement disclaimer. 

*Please see Molson Coors’ press release to find important forward-looking statement disclosure and applicable reconciliations of non-GAAP financial measures included in this story.