Molson Coors to Launch New Products

Zacks

Reuters recently reported that beer maker Molson Coors Brewing Company (TAP) plans to introduce new products to revamp its flagging beer sales. Numbering among the newly introduced products is an iced tea flavored beer under the Coors Light brand. The company gave out this information at an analyst meeting held in New York recently.

Molson Coors, the maker of popular beer brands like Coors Light and Miller Lite, has been witnessing weak beer sales due to changing consumer tastes and an inclination towards wines and cocktails. Moreover, continuing weak economic conditions and high unemployment among core beer consumers have also pulled down sales.

Global beer volumes were down 0.7% in full year 2011. The company believes that Coors Light Iced Tea as well as other new products like Carling Zest (citrus flavored beer) and Leinenkugels beer will revitalize beer sales and subsequently reduce pressure on margins.

Coors Light Iced Tea is expected to be launched in Canada and Molson Coors may also look to expand it in the US. Reuters further reported that, at the meet, management highlighted that Batch 19, the new craft beer, is doing better than expected. The beer will be launched in additional countries in April this year and is expected to be available in 40 US markets by fall.

Molson Coors also plans to penetrate the developing and emerging markets like China, Russia, India and Ukraine. The company will market brands like Coors Light, Carling and Cobra in these fast growing nations. Management expects the emerging markets, which comprised just 4% of net sales in 2011, to become a significant contributor to top- and bottom-line growth by 2015.

Our Recommendation

We currently have a Neutral recommendation on Molson Coors. The stock carries a Zacks #2 Rank (short-term ‘Buy’ rating).

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