Weekly Sip: Molson Coors Faces Declining Beer Demand | Nestlé Adds Kit Kat to Coffee Mate

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Molson Coors Struggles With Slumping Beer Sales

The owner of Coors Light is facing a backlash and seeing the momentum it gained last year when rival AB InBev faced a consumer boycott fade.

Molson Coors’ earnings report this week was mixed, with net sales for the most recent quarter down 1.5% year over year. Brand volumes in the U.S. fell 7.3% during the period.

CEO Gavin Hattersley attributed the volume decline to inventory build-up, which the brewer expects to continue in the second half of the year. This is expected to be offset by Molson Coors’ price increases and cost-cutting measures.

Hattersley pointed to Coors Banquet as a positive sign for the company. The CEO said the 150-year-old beer grew 13 percent in volume and dollar share, the fastest among the top 15 beer brands in the U.S. in the first half of this year. The brand’s nostalgic appeal is driving sales growth, Alyssa Bush, Coors Banquet’s senior marketing manager, said in an interview earlier this year.

Molson Coors faced a 14-week strike at its Fort Worth, Texas, plant earlier this year, during which the company continued production with salaried workers. Hattersley said the beverage giant has been building up inventory to ensure a healthy supply ahead of the summer.

“We didn’t overship. We shipped what we wanted in the first half of the year, so we didn’t have any inventory issues going forward,” Hattersley said.

The company believes that going beyond beer, which was a priority during Hattersley’s tenure, to offer “premium and above” products can help drive growth. Hattersley has teased that a non-alcoholic beer product is in the works. He also pointed out that Simply Spiked is growing into a $100 million brand, which was launched two years ago as part of a multi-year collaboration with Coca-Cola.

“Consumer tastes are rapidly evolving and changing, so flavor innovation is critical to keeping pace with their demands,” Hattersley said. “We believe we have an influential brand with potential in this space.”

— Chris Casey

Coffee Mate, meet new friends at KitKat

Nestlé's Coffee Mate energizes your morning coffee with Kit Kat, a chocolate-filled wafer candy.

Launching this month, Coffee Mate’s Kit Kat creamers join other products from the brand on the market, including Caramel Apple Crisp and Zero Sugar White Chocolate Peppermint. They join several fall fan favorites, including Pumpkin Spice, Peppermint Mocha, and Nestlé Toll House Brown Butter Chocolate Chip Cookie.

“Consumers are constantly experimenting with their cups, from hot to cold, savory to sweet, morning to night,” Leonardo Aizpuru, Nestlé’s vice president of brand marketing for beverages and business units, said in a statement. “Our priority is to continue to deliver innovative flavor creations for every moment of experimentation.”

Hershey has a license to produce and distribute Kit Kat in the United States from Nestlé, which owns the brand.

As consumers seek variety and innovation, the creamery space has become a popular avenue for experimentation. Few places are as active as Coffee Mate.

While the creamer is best known for flavors like French Vanilla and Hazelnut, the company isn't shy about incorporating other brands' flavors into its products.

In recent years, Coffee Mate has released limited-edition flavors like Snickers, Cinnamon Toast Crunch, Twix, Rice Krispies Treats, Pop-Tarts, and Golden Grahams. The move to incorporate other brands into the mix not only creates variety, but also creates a sense of familiarity that encourages trial, since consumers are already familiar with other brands and their flavors.

— Christopher Dohring

British Canned Cocktail Makes Its American Debut

There's no shortage of canned cocktails on the market, including AB InBev's Cutwater drink, but one brand across the pond is hoping to make a splash in the much larger U.S. market.