Molson Coors is pivoting away from beer, and blaming young drinkers for it.
On Wednesday, the company announced that it is taking “brewing” out of its name, rebranding as the Molson Coors Beverage Co. It plans to cut between 400 and 500 jobs globally, or nearly three percent of its workforce. The beer giant’s new strategy focuses on non-beer products including its canned wine and hard coffee, which launched this year. It has also invested in cannabis drinks.
Molson Coors spokesperson Matthew Hargarten told VICE that the “difficult changes” give the company the “fuel” it needs to attract millennials and Gen Z. “Younger drinkers are drinking less, they're drinking more premium products and they're more health-focused—they're focused on calories, carbs and sugar,” he said.
Molson Coors is in the same boat as other mainstream beer brands which are having trouble convincing young drinkers to buy watery mass-market beer the way that previous generations did. Analysts have called it a “beer industry crisis,” fueled by younger generations’ changing tastes.
Mainstream beer isn’t “authentic”
Molson Coors isn’t alone. Last year Budweiser was knocked off the list of the top three best-selling brands tracked by Beer Marketer’s Insights after being a fixture there since the 1970s.
A 2018 Berenberg survey of more than 6,000 people between the ages of 16 and 22 in the U.S. found that Gen Z doesn’t find Big Beer brands “authentic” and that they prefer wine and spirits to beer. The survey didn’t specifically ask respondents if these brands taste like piss or not, but we can speculate.
The research firm also found Gen Z is already drinking 20 percent less alcohol per person than boomers and millennials and 64 percent of Gen Z expect to drink alcohol less frequently than boomers and millennials throughout their lives.
Molson Coors CEO Gavin Hattersly said in a statement that “business is at an inflection point. We can continue down the path we’ve been on for several years now, or we can make the significant and difficult changes necessary to get back on the right track.”
Although beer sales have slumped in Canada and the U.S., the craft beer segment continues to grow. Sales of craft beer jumped seven percent last year to $27.6 billion in America. Molson Coors on Wednesday announced its focus on “above-premium” beers, a category that includes craft beer.
The sober trend
As Big Beer struggles to reinvent itself to stay relevant for younger drinkers, niche companies have an opportunity to steal market share. Partake Brewing is a Toronto-based company that sells its non-alcoholic craft beer in Canada and the U.S. and is riding the sober trend.
Stephen Burmaster, Partake’s vice president of sales and marketing, claims one thing that makes his company unique is its appeal to young women, who have traditionally been shunned by mass marketing. Ignoring this important segment of drinkers is a mistake, according to Burmaster. The craft beer gender divide is 68.5 percent male and 31.5 female. Partake’s share of female customers—mostly millennial moms, Burmaster says—is high at 45 percent.
The challenge for companies like Molson Coors, which has a “350 year heritage” of making beer, is to reinvent itself fast enough for jaded and skeptical millennial and Gen Z palates. If that means moving into cannabis, coffee, wine, and pretty much anything but beer, so be it—just don’t blame millennials for the job cuts.
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