Introduction

Molson Coors, the fourth-largest brewer in the world, is facing a significant challenge in the form of an epic collapse in demand for its flagship beer brand, Bud Light. As a result, the company is making strategic moves to expand its beverage portfolio beyond traditional alcoholic offerings and cater to changing tastes among young drinkers. Molson Coors aims to grow both sales and earnings by responding quickly to the preferences of Generation Z, who consume 20% less alcohol than their millennial counterparts. The company’s research also reveals that 30% of Gen Z consumers don’t drink alcohol at all.

The Rise of Non-Alcoholic Beverages

In order to capitalize on changing consumer preferences, Molson Coors is focusing on non-alcoholic products. The company aims to go beyond beer and enter new product categories such as energy drinks and non-alcoholic beers. CEO Gavin Hattersley emphasized this shift in strategy during an interview with CNBC’s “Mad Money,” stating that the company is aligning with the trend of young consumers seeking healthier alternatives to traditional alcoholic beverages. The non-alcoholic beer category, although currently accounting for less than 1% of the market, is growing at double-digit rates. To leverage this growth, Molson Coors is launching a non-alcoholic version of its popular Belgian wheat beer brand, Blue Moon.

Partnerships and Innovations

Molson Coors is also expanding its partnerships to broaden its product offerings. The company has teamed up with Coca-Cola to introduce a new brand, Peace Hard Tea, alongside spiked versions of Coke’s Simply juice line. Additionally, Molson Coors aims to attract Generation Z consumers who do drink alcohol with its Vizzy Hard Seltzer. Another key aspect of Molson Coors’ strategy is the development of a line of sugar-free energy drinks called ZOA, co-founded by Dwayne “The Rock” Johnson. The company recently expanded its minority stake in ZOA and gained a seat on the board, solidifying its commitment to expanding into the energy drink market.

Better Understanding Gen Z Consumers

To better understand the tastes and preferences of Generation Z, Molson Coors has developed a “Legal Age Gen Z Culture Panel.” This initiative allows the company to gather insights from young consumers and tailor its offerings accordingly. Chief Commercial Officer Michelle St. Jacques highlighted the importance of understanding what drives the younger demographic in order to build products that resonate with them. Molson Coors recognizes that young consumers perceive moderate alcohol consumption as unhealthy and are increasingly opting for alternatives such as marijuana, which is now legal in several states. Moreover, studies show that the proportion of non-white individuals in the 18-34 age group has doubled in the last two decades. These minority groups tend to consume less alcohol than their white peers, impacting the overall drinking rate among young Americans.

Conclusion

In response to a decline in demand for its flagship beer brand and changing preferences among young drinkers, Molson Coors is diversifying its product portfolio to include non-alcoholic beverages and energy drinks. By focusing on expanding beyond traditional alcoholic offerings, the company aims to capture the attention and loyalty of Generation Z consumers. Partnerships with Coca-Cola and the introduction of new brands such as Peace Hard Tea and Vizzy Hard Seltzer demonstrate Molson Coors’ commitment to adapting to consumer preferences and expanding its market share. With the launch of Blue Moon Non-Alc and the further development of ZOA energy drinks, the company is well-positioned for growth and success in the evolving beverage industry.