Molson Coors is seizing the moment as it enjoys sustained growth in Q2, largely due to the fallout from Bud Light’s controversy with transgender influencer Dylan Mulvaney. Seeing an opportunity, Molson Coors is planning to ramp up its marketing spending by around $100 million to preserve this momentum.
During Q2, the firm’s underlying marketing, general, and administrative expenses rose by 4.1% YoY as it increased its media activity. CEO Gavin Hattersley emphasized that the revitalizing work put into Molson Coors’ business operationally and marketing-wise enabled the company to capitalize on the situation.
Had the Bud Light incident occurred in 2019, Hattersley noted, the company would not have been able to meet the demand or enjoy the sales benefit it experienced in 2023.
However, it’s not all rosy, as the overall earnings picture was mixed, with revenue falling short of analyst expectations. But the CEO took pride in the success, pointing out that Coors Light and Miller Lite combined now hold a market share 50% larger than Bud Light and 30% larger than Modelo Especial. Modelo unseated Bud Light’s two-decade reign as the top-selling beer in the U.S. in Q2.
To continue capitalizing on this growth, Molson Coors plans to increase its shopper marketing dollars around convenience stores. In this space, the company has historically under-indexed in the U.S. Molson Coors also raised its 2023 financial guidance and now anticipates a high single-digit increase in net sales for the entire year.
Molson Coors’ planned $100 million hike in marketing spend is a bold move, reflecting confidence in their ability to continue growing their core brands. While benefiting from a competitor’s missteps might have contributed to their recent success, it’s the long-term commitment to revitalizing their brands that seems to have positioned them for growth. However, missing revenue expectations is a concern and should serve as a reminder that continued success will likely require more than just capitalizing on a competitor’s controversy. Balancing investment in marketing with sustained operational excellence and innovation will be key to preserving momentum. Their focus on expanding marketing in the convenience store space shows a strategic direction that may unlock further growth opportunities. It will be interesting to see how this substantial investment pays off in the increasingly competitive beer industry.