money Summer alcohol trends: Molson Coors doubles down on hard seltzer, High Noon surges
With summer right around the corner, all eyes are on the beer and alcohol industry.
On Tuesday, Molson Coors (TAP) delivered quarterly earnings that beat analyst expectations, posting revenue of $2.2 billion, along with adjusted earnings of $0.29 per share.
Molson Coors CEO Gavin Hattersley said in a press release that the results represented "the most quarterly top-line growth this company has had in more than ten years," reiterating its 2022 guidance for both top and bottom line growth.
Still, the beer giant cited inflation as a top concern for the rest of the year, along with the pandemic.
The company said it's been able to battle inflationary headwinds by utilizing "strong pricing and sales mix," crediting its top-selling brand portfolio, that also includes hard seltzers.
"Many of our core brands continued to outperform their peers, we again earned the largest growth in U.S. hard seltzers among major brewers and our expansion beyond beer continued to track ahead of our $1 billion revenue target," Hattersley said.
Molson Coors put its full support behind Topo Chico Hard Seltzer (a standout for the quarter), along with Vizzy Hard Seltzer, after the company discontinued its Coors Light Hard Seltzer brand just last year.
At the time, the company doubled down that the hard seltzer boom was here to stay, despite the fizzle that's occurred since the category's meteoric rise in 2018 when sales volume hit peak growth of 246%, according to IWSR data.
Hard seltzer volume sank 2.5% year-over-year with all key players' volume declining, with the exception of Mark Anthony Brands (White Claw, Mike's) and Molson Coors (Topo Chico, Vizzy, Henry's), Bank of America (BAC) said in a recent note.
AB InBev's (BUD) hard seltzer portfolio, which includes Bon & Viv, Bud Light Seltzer, and Michelob ULTRA Organic Seltzer, declined 13% year-over-year.
Meanwhile, White Claw saw 1% year-over-year volume growth and gained 15 basis points sequentially (with market share at 43%.) Truly dropped 12% with a loss of 65bps, Vizzy lost 25bps, Corona lost 20bps, and Topo Chico gained 60bps (all sequential).
Ready-to-drink category surges ahead of summer
The ready-to-drink (RTD) cocktail category is expected to continue its strong momentum heading into summer 2022.
According to NielsenIQ, vodka-based drinks accounted for more than half of the ready-to-drink category’s off-premise sales for the 52-week period ending October 2, 2021 — increasing 110% over the previous year.
There were also notable increases in tequila-based RTDs at 138% growth, followed by rum-based drinks at 132%.
Whiskey maker Jack Daniels (BF-B) recently came out with its own line of ready-to-drink cocktails, featuring flavors that include Jack & cola; Jack, honey & lemonade; and Jack apple fizz.
Still, despite the variety of new products on the market, High Noon remains a dominating force.
The vodka-based ready-to-drink offering has held the number 1 position on Drizly’s list of top-selling RTD brands for two years now — with even more room to run.
The brand just released a new pool variety pack which features two new flavors (guava and kiwi), in addition to a limited line of High-Noon inspired bathing suits and apparel in collaboration with Chicago-based clothing brand, Tropical Bros.
The swimwear, along with the Hawaiian shirt, retails for roughly $50 per item.
High Noon's rapid success is due, in part, to its marketing.
Although the brand is technically a vodka-based ready-to-drink offering, it positions itself as a vodka-based hard seltzer; consequently, it's been able to capture some of that hard seltzer market, in addition to the RTD category at large, says Liz Paquette, Drizly’s head of consumer insights.
Competitors like Truly, owned by Boston Beer Company (SAM), have also released new offerings ahead of summer.
Earlier this week, the hard seltzer brand launched its own limited-edition poolside variety pack, inspired by pop star Dua Lipa. Dua will serve as the company's "chief flavor officer" of the new pack, which includes four new flavors: strawberry melon fizz, orange peach spritz, piña colada and kiwi mojito.
The pack will be available nationwide beginning May 15.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 or email her at alexandra.canal@yahoofinance.com
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