Due to a decline in beer demand in North America, Molson Coors Brewing Co. is advancing its focus on premium and inventive beverages, including cannabis-infused drinks.
“Consumers are drinking slightly less, but better,” said CEO Mark Hunter during a conference call with analysts, reports The Canadian Press.
Molson Coors just released its fourth-quarter financial results. Last year, the company’s net profit decreased to $1.12 billion on $10.8 billion of revenues, from $1.56 billion on $11 billion of revenues in 2017.
Hunter noted that the company must step up its premium portfolio and focus more on innovative products. The company plans on doubling its media spend on several brands, including Belgian Moon, which is known as Blue Moon in the United States. In fall 2019, the company is scheduled to launch a line of cannabis-infused beverages. The federal government is legalizing edibles by Oct. 17, 2019.
“Through the year we further scaled our cost-saving program which insulated us in part from the effects of weaker industry demand in North America, higher than anticipated input inflationary pressures and challenges associated with the implementation of our U.S. brewery supply chain system,” Hunter said in a press release.
The brewer released updated financial results for 2016 and 2017 due to income tax accounting errors, according to The Canadian Press. In 2016, there was $399.1 million in an overstatement of net income. In addition, U.S. tax changes resulted in an overstatement of income tax expense and understatement of its net income of $151.4 million in 2017.
Molson Coors reported a 2018 fourth-quarter profit of $76 million for the three months ending on Dec. 31—a huge difference compared to the $716.9 million profit from the previous year.
Net sales totalled $2.42 billion in 2018, down from $2.58 billion in 2017.
Analysts polled by Thomson Reuters Eikson anticipated Molson Coors would earn 79 cents per share in adjusted profits in the quarter on $2.5 billion in revenues.
“We enter 2019 with a U.S. commercial plan focused on mix and share improvement that is fully resourced and showing early signs of impact against Coors Light, a commercial strategy that is working in Europe and International and continually improving commercial trends in Canada,” Hunter said. “We are focused on further strong free cash flow delivery and deleverage supported by more than $200 million of cost savings in 2019 and further $450 million across 2020 – 2022.”