Volumes for Miller Lite and Coors Light were both flat during the most recent quarter, the first time neither brand decreased since the MillerCoors joint venture started in 2008.
Still, MillerCoors chief executive officer Gavin Hattersley said there is work to do for the company to reach its goal of total volume growth by 2019. The company has seen volumes drop by 10 million barrels since the joint venture started.
Hattersley said getting to growth will require growth from the Miller Lite and Coors Lite brands, improvement in above premium and craft brands and reversing declining trends in the economy brands.
“It does mean that we have to return respect to Miller Lite and Coors Light and get those brands back into growth and that’s what we’re focusing heavily on at this point,” he said, adding he is pleased with the progress the brands have made.
The joint venture’s financial performance for the first quarter of 2016 was also positive. Net income was up more than 9 percent, to $338.1 million. Total revenue increased roughly 2 percent, to $2.1 billion.
Sales to wholesaler volumes were up 1.3 percent while sales to retail volumes were down 1.3 percent.
The company reported that both Miller Lite and Coors Light gained market share during the quarter and credited marketing campaigns tailored to each brand’s history for the performance. The Miller Lite campaign targets the beer’s authenticity and originality, while the Coors Light campaign focuses on the beer’s history and climbing personal mountains.
The above premium portfolio, which includes Henry’s Hard Soda and the Redd’s brand, saw sales to retail increase in the low-single digits. The company credited the launch of Henry’s Hard Soda for the gains and said the Redd’s family was down slightly.
The Tenth & Blake portfolio, which includes Blue Moon and Leinenkugel’s, was down in the low-single digits, the company said. Blue Moon was hampered by a slow transition from winter to spring seasonals. Leinenkugel was mostly flat, with the Shandy portfolio group in the double digits on the strength of the Grapefruit Shandy.
Scott Whitley, Tenth & Blake president and chief beer merchant, said the increasing fragmentation and complexity of the craft beer industry makes it more challenging to maintain market share.
“We’ve got some plans across the portfolio that also link to our M&A strategy that we think will help us maintain a strong position in craft and a growth position going forward,” he said.
Hattersley said the company has “a clear strategy” when it comes to acquiring craft breweries, but also said the focus is on returning Coors Light and Miller Lite to growth.
“That is the engine of our organization,” he said. “We’ll continue to invest behind what’s working, we’ll stop investing in what’s not working and we’re not afraid to make those kinds of decisions.”
