Molson Coors puts faith in marketing to reverse sales dip

Molson Coors is to press forward with plans to launch brand extensions and will increase the marketing support for brands such as Carling and Corona in a bid to kickstart waning demand across Europe.

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Molson Coors planning to ramp up marketing for brands such as Carling Zest.

The brewer says the investments will come against an innovation program that will see it ramp up efforts to premiumise its portfolio. It includes planned activity in the UK around its Carling Zest range, which Molson Coors claims is growing strongly, and its recently launched range of Carling Coolers fruit-flavoured beers.

It comes as the brewer reported a 2.9 per cent year-on-year dip in global sales to $2.2bn (£1.4bn) in its second quarter. The brewer blamed poor weather for denting demand in Europe where sales volume decreased 2 per cent year-on-year. It is a downgrade on the brewer’s first quarter performance where sales jumped 1.6 per cent year-on-year to £1.1bn.

Peter Swinburn, chief executive of Molson Coors, expects demand to remain “weak”, but hopes the upcoming investments across brands such as Coors Light, Carling and Staropramen will set the business up for “long-term” growth.

Swinburn says: “We delivered these results despite weak consumer demand and poor weather across all of our markets. Most of our key brands in core markets gained or held share versus a year ago. Our results also benefited from the introduction of brand and packaging innovations globally and from the strength of our above-premium brands, which gained market share in each of our businesses.”

Sales of the brewer’s Carling brand plummeted 7.1 per cent year-on-year to £306.2m for the 52 weeks to 22 June, while volumes of the beer sold declined 10.5 per cent to 172.3 litres over the same period, according to IRI Worldwide. It has returned to the more blokeish positioning it dropped in 2011 to appeal to younger drinkers.

Swinburn: “We are focused on the drivers that matter in our business: driving strong core brand performance, leveraging our value-added innovation pipelines, increasing our share of the above-premium market, capturing significant sustainable cost savings and allocating cash by our disciplined tax-centered process that builds long-term shareholder value.”

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