E-Malt.com News article: Canada: Molson Coors to ‘reinvigorate’ Canadian market by two new beers

Molson Coors Brewing Co. is introducing new brands in Canada to try to reinvigorate a "beer market that has lacked excitement and news" for several years, the company's top executive in Canada was quoted as saying by The Wall Street Journal on November, 18.

The beer giant is trying to reverse declining sales volumes in the country with the launch this week of Molson M and the recent launch of low-calorie Molson Canadian 67.

"One of the things we have to stay focused on is keeping our category exciting and relevant," and "attract people we haven't before," Dave Perkins, chief executive of Molson Canada, said in an interview.

Mr. Perkins, who became CEO in a management shake-up in June, said Canada's beer market has lagged the U.S. market in product innovation. Molson Coors controls about 40% of Canada's beer sales.

The company's new brands come at a time when the beer maker has been losing market share to smaller regional players amid heavy discounting in the beer segment.

Molson Coors's new products will face stiff competition from Anheuser-Busch InBev NV's Labatt unit in Canada, as well as small-batch "craft" beers that have gained traction in the country.

"I'm certainly not satisfied with where I see the top line," said Mr. Perkins.

The company began selling Molson M in Quebec this week and intends to eventually sell it nationally. The brew is made using a proprietary process that Molson calls "microcarbonation," which is designed to remove dissolved oxygen from the beer and help preserve flavor. It will sell at a similar price to Coors Light and Molson Export.

The company previously said it would launch Molson M and Molson Canadian 67 during its earnings conference call earlier this month.

Molson Canadian 67, named for the brew's calorie level, went on sale in Ontario and other parts of Canada in recent weeks. It is aimed at women, as well as men who are 30 and older.

Molson Coors lost a percentage point of market share in Canada in the latest quarter. The brewer said the Canadian division's underlying pretax income in the third quarter fell 7.7% to $139.3 million. Its sales to retailers slipped 3.2% by volume.

Canada is the biggest source of profits for Molson Coors, which co-owns MillerCoors LLC, the No. 2 U.S. brewer, with London's SABMiller PLC. The company's main rival in Canada is Anheuser-Busch InBev, which reported a 43% share of the market last year.

Molson Coors will also in the coming months unveil a new advertising campaign for Molson Canadian, a brand that "has wandered some over the years," Mr. Perkins said.

Molson Canadian's share of the Canadian beer market fell to 7.2% this year from 9.2% in 2005, according to market-research firm Euromonitor International.

Mr. Perkins said consumers in Canada are showing similar levels of thrift when buying beer at stores as they do in the U.S., where industry volume is also down.

However, in Canada there has been little "trading down" to cheaper brands, but rather consumers taking advantage of promotions by brewers within the same price segment.

"There is a cautiousness that we are seeing with consumers," Mr. Perkins said. "We need to ensure that we have brands that suit all occasions and all price points.”



18 November, 2009