Molson Coors hones economy brand portfolio focus with four key brands

From Molson Coors & Alex Parker:

When Molson Coors Beverage Company CEO Gavin Hattersley introduced his plan to kickstart the company in 2019, he promised a leaner organization more focused on growth opportunities.

Most of the splashy headlines generated in the wake of the new strategy related to the launch of a slate of new products, such as the hard seltzer brands Vizzy and Topo Chico Hard Seltzer and non-alcohol offerings including ZOA and La Colombe. The company also drew attention for new campaigns for core brands like Coors Light, Miller Lite and Blue Moon, each of which responded with a streak of positive momentum.

Just beneath the surface, though, the company has been working to strengthen and refocus its U.S. portfolio of well-established economy brands, a critical roster of beers and flavored malt beverages that drive a substantial part of Molson Coors’ business.

In 2021, the company unveiled the first step of that plan: Streamlining the portfolio in the U.S. to focus on four key brands in four key verticals: Miller High Life (regular beer), Keystone Light (light beer), Steel Reserve (flavor) and Icehouse (ice beer).

“We knew we need to make hard choices last year given the complexity we had in our portfolio and (a desire) to make our operation more efficient. Our goal was to focus on the brands that can drive our business, that can help us grow in this segment,” says Katya Chen, director of Molson Coors’ economy brands. “The changes we implemented made our economy portfolio stronger.”

While Molson Coors has shifted its overall portfolio into more above-premium offerings, it remains committed to its economy brands, which will continue to play an important role in its U.S. portfolio.

Those lower-priced brands draw in younger legal-age drinkers, have the ability to grow Molson Coors’ footprint in both urban and rural areas and provide space for innovation.

“You can’t underestimate the importance of this segment and its consumers,” Chen says. “They are very loyal. They drive the most (shopping) trips, the highest repeats rates, highest (annual spend on beer) – the list goes on. It’s a segment we can’t ignore.”

As Molson Coors moves into its first full year of the strategy, Chen and her team are preparing a blueprint for each brand to win over consumers and stabilize share of the sizable segment. 

“We’re clearly focused with our target consumers with each of these brands,” she says.

Miller High Life

The crown jewel of Molson Coors’ economy portfolio, Miller High Life, has been known as the Champagne of Beers since 1903 and a favorite of bartenders for almost as long. The brand will seek to build off of creative and offbeat marketing campaigns like last year’s gingerbread dive bar and the establishment of the Champagne of Beers region within Milwaukee’s Miller Valley.

“We’re really focused on celebrating the high life,” Chen says. “You’ll see that come to life in a variety of ways that employ the attitude and joie de vivre that High Life is known for.”

The brand also plans to play in the channel where it outshines the competition: bars, taverns and pubs, Chen says, with additional collaborations with craft brewers and by hosting on-premise events that build High Life’s dive bar bona fides.

“There’s a reason bartenders and beer drinkers love High Life. We’re going to continue to be the beer people ask for at their favorite tavern,” Chen says.

Keystone Light

Last year, Keystone Light set its sights on rural drinkers, a core audience it will continue to court in 2022 with a new campaign that celebrates the rural lifestyle, slated to debut later this spring.

A key piece of its rural outreach is a new partnership with outdoor lifestyle apparel brand Realtree, which operates in the hunting and fishing space.

And the brand also will have a major presence around NASCAR events with its renewed sponsorship of Team Penske’s No. 2 car, driven this season by rookie star Austin Cindric, who took the checkered flag at the 2022 Daytona 500.

“For Keystone Light, we’ve really taken time to get know the rural consumer, and we’ve got a new campaign that’s really in touch with them and will come to life in a number of ways,” Chen says. “We have some really exciting partnerships that will help amplify the brand and give us relevance and credibility with rural consumers.”

Steel Reserve

With the Steel Reserve Alloy and Tiki Series, Molson Coors is seeking to win over consumers with flavor. The high-gravity flavored malt beverages are sold in 16-ounce and 24-ounce cans, making it a convenient, after-hours option for consumers on the way home from work.

The brand’s new Tiki Series plays in a slightly new space for Molson Coors. The cocktail-inspired 10% alcohol-by-volume FMB hit the market at a time when higher-ABV beverages were taking flight. Beverages in the 10% ABV and higher range are outpacing the overall industry, posting growth of more than 30% over the last three years, according to research conducted by the brand.

“We think we can own this segment of really flavorful, high-ABV beers,” Chen says. “They appeal to a consumer who’s looking for flavor in a well-balanced beer that also has that elevated alcohol content. We know what makes consumers pick up these brands, so the display support needs to be there.”

The brand is pushing a strategy it calls “four in the door,” which asks retailers to get at least four flavors of Steel Reserve merchandised next to each other in cooler doors to maximize sales.

Icehouse

First introduced in 1993, Icehouse is among the standard bearers of ice beer, brewed specifically to concentrate aroma and flavor, while increasing ABV. With a refreshed strategy aimed at winning customers in the off-premise, Icehouse is looking to own the ice beer segment.

“We are making sure we have the right tools to convert customers in-store,” Chen says. “We have new in-store tools with updated messaging, and we’re testing out-of-home advertising to drive consumers to retail and remind them of our brand.”

As Molson Coors circles in on each brand’s particular consumer, it’s also working to improve their positioning in key chain and big-box accounts.

“We’ve got the right brands and the right plans to win over economy consumers,” Chen says. “This is a really important segment for us. And it’s a huge opportunity, too.”