World: Beer giants leaning into premium craft brews and non-alcoholic options

Beer giants are leaning into premium craft brews and non-alcoholic options as traditional brands aim to keep up with rising inflation and shifting consumer sentiments, FoodDive reported on February 19.

Molson Coors and Heineken both announced last week in their respective earnings calls their intention to focus on premium brands as the beer category overall faces a decline. Sales across the industry fell 2.9% in the last year, according to a report released last week by TD Cowen, with domestic beer down 4.2% year over year.

Gavin Hattersley, the CEO of Molson Coors, said the alcohol giant offloaded four underperforming craft brands last year as it prepares to put more resources into its best-selling premium brews like Blue Moon.

“After further fine-tuning our portfolio last year, including divesting underperforming craft breweries, our resources are focused on scalable opportunities within our expanding above premium portfolio brands in both beer and beyond beer,” Hattersley said.

The company’s volumes were down 3% in the quarter and overall net sales revenue dropped 1.9% year over year. Molson predicts its planned 1% to 2% price hike this year will lead to sales increases in the next quarter, Hattersley said.

Coors Banquet — which has seen a surge in popularity over the past two years after its appearance in TV shows like “Yellowstone” — continues to be a bright spot for Molson Coors, with 16% volume growth in the last quarter. The beer giant sees heavy potential for the brand to continue growing its awareness this year, particularly with younger drinkers.

While Molson Coors is in a better position to weather the category’s headwinds than in years past, Robert Moskow at TD Cowen told investors the company’s premiumization plan is slow to take hold and will take longer than anticipated to materially benefit the brewer.

With beer volumes expected to remain challenged throughout 2025, Heineken is also looking to expand beyond its traditional offerings. The company pointed to premium brews and its flagship non-alcoholic offering as high points in its portfolio with sales of Heineken 0.0 growing faster than the standard Heineken, according to data shared with The Wall Street Journal.

The brewer reported an 8.3% increase in operating profits in 2024, with net revenue declining 1.8%.

Dolf van den Brink, Heineken’s CEO, said on its earnings call the company believes its brewery optimization and digital technology investments can help it weather category issues in the coming year.

The representation of premium offerings in the Heineken’s Americas portfolio increased from 30% in 2021 to 36% in 2024, he said. This strategy, van den Brink said, can help the company grow its market share in the category.

In a note to investors, Bank of America analyst Andrea Pistacchi said the company’s strategy laid out in the earnings call was “reassuring and received well after various disappointments on results from Heineken.”

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