Molson Coors Beverage Company TAP is strategically reinforcing its market position with a comprehensive revitalization plan aimed at achieving sustainable top-line growth. The company is focusing on streamlining its organization and reinvesting resources into its brands and capabilities. A key component of this strategy is enhancing its iconic brands, expanding its presence in the above-premium beer segment and exploring new opportunities within and beyond the beer category.
Molson Coors' strategic focus on innovation and premiumization has been paying off, as seen in its strong performance across various regions and product categories. The company's aggressive expansion of its above-premium portfolio has positioned it to capture more of the growing consumer demand for higher-quality beverages.
The Zacks Rank #3 (Hold) stock has gained 2.1% in the past six months against the industry’s 7.1% decline.
TAP Price Performance in the Past Six Months
Image Source: Zacks Investment Research
Molson Coors' Strategy for Sustainable Growth
In the United States, Molson Coors’ core power brands like Coors Light, Miller Lite and Coors Banquet have demonstrated continued growth, particularly Coors Banquet, which has achieved remarkable volume growth and maintained an upward trend in market share for 13 consecutive quarters. Coors Banquet's success in becoming the fastest-growing top 15 beer brand in the United States is a testament to the strength of Molson Coors’ brand positioning and its ability to resonate with consumers.
The EMEA & APAC region has been a key driver of Molson Coors’ global premiumization strategy, with more than 50% of its net brand revenues now coming from above-premium products. Madri's impressive growth of more than 15% in the third quarter is a prime example of how the company has successfully built a premium portfolio in these regions. Additionally, the acquisition of Cobra, an over 200,000-hectoliter above-premium brand in the U.K., strengthens Molson Coors’ presence in the competitive U.K. market, expanding its premium beer offerings.
The company is enhancing digital capabilities across the commercial, supply chain and employee functions while maintaining strong support for its core portfolio. Along with this, Molson Coors Beverage Company is making significant strides in expanding its brewing and packaging capabilities with a new multiyear project in the U.K., fueled by strong performance from its Madri brand.
TAP Stock’s Promising Outlook
Molson Coors' reaffirmed 2024 outlook demonstrates confidence in its ability to drive profitability despite industry challenges. By improving cost forecasts, particularly for packaging materials, transportation and administrative expenses, the company is positioned to meet its mid-single-digit growth target for underlying EPS. The accelerated share repurchase program supports this positive outlook, further enhancing shareholder value.
The acquisition of a majority ownership stake in ZOA is a notable strategic move. It positions Molson Coors to capitalize on the growing demand for healthier, better-for-you energy drinks. With complete control over the brand’s marketing, retail and direct-to-consumer sales, Molson Coors can enhance ZOA’s market penetration and development. This acquisition could be a key driver in diversifying Molson Coors' portfolio and expanding its presence in the rapidly growing functional beverage space, aligning with consumer trends favoring healthier alternatives.
Current Pressures on TAP
Molson Coors’ Americas business, which comprises operations in the United States and Canada, has been reeling under the pressures of the tough macroeconomic conditions in the United States. This has significantly impacted the U.S. beer industry and the company’s U.S. financial volumes during this year's peak selling season.
The macroeconomic pressures, combined with the unfavorable shipment timings and the wind-down of a contract brewing agreement, resulted in a 17.9% decline in U.S. financial volumes and a 6.2% drop in brand volumes, reflecting last year’s strong growth comparison and weaker above-premium performance. As a result, Americas segment sales fell 11% year over year, further impacted by currency headwinds.
Three Stocks Showing Potential
We highlighted some better-ranked stocks from the broader Consumer Staples space, namely Ingredion INGR, Freshpet, Inc. FRPT and Vita Coco Company COCO.
Ingredion is a solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. It currently carries a Zacks Rank #2 (Buy). INGR has a trailing four-quarter earnings surprise of 9.5%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ingredion’s current financial-year EPS indicates growth of 12.4% from the year-ago reported numbers.
Freshpet, together with its subsidiaries, manufactures, distributes and markets natural fresh meals and treats for dogs and cats, currently carrying a Zacks Rank of 2. FRPT delivered an earnings surprise of 144.5% in the last reported quarter.
The Zacks Consensus Estimate for Freshpet’s current fiscal year’s sales and earnings implies growth of 27.2% and 228.6%, respectively, from the year-ago reported number.
Vita Coco develops, markets and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. The company currently has a Zacks Rank of 2. COCO has a trailing four-quarter earnings surprise of 17.6%, on average.
The Zacks Consensus Estimate for COCO’s current financial-year sales and earnings suggests growth of 3.8% and 29.7%, respectively, from the year-ago reported figures.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpVita Coco Company, Inc. (COCO) : Free Stock Analysis Report
Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
Freshpet, Inc. (FRPT) : Free Stock Analysis Report
Ingredion Incorporated (INGR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
