Brewer MillerCoors reported a modest 3.5% increase in third-quarter net income as higher prices and cost cutting offset a drop in beer volume. Here’s what you need to know about the latest earnings report.
What you need to know: Many of MillerCoors’s long-established brands continue to post volume declines in the latest quarter, a trend that has prolonged for years as more consumers prefer craft beer offerings and as the spirits and wine industries steal market share from the overall beer category. Volume dropped for Coors Light, Miller Lite, Keystone Light and Milwaukee’s Best.
But some of the MillerCoors’s portfolio performed well. The Redd’s franchise, a flavored malt beverage that first hit shelves nationally in early 2013, posted a double-digit increase in volume. Redd’s is a way MillerCoors aims to defend itself against spirits and gain back market share, as well as attract Millennial consumers that increasingly want more flavorful offerings. Blue Moon volume also grew, as did the Leinenkugel’s franchise. Leinenkugel’s growth was driven by Summer Shandy, an alcoholic beverage that has performed well since its debut in 2007.
The big number: Total sales increased 0.9% in the third quarter to $2.07 billion at MillerCoors, a joint venture created in 2008 to combine the U.S. beer operations of Molson Coors and SABMiller PLC of the United Kingdom. Net income for the period rose to $376.7 million. But volume, measured as sales-to-retailers, slipped 3.7%.
What you might have missed: Blue Moon is poised to celebrate its 20th anniversary next year, and volume for the brand grew in the low-single-digits in the third quarter. MillerCoors calls Blue Moon the most popular craft beer in the U.S., though the Brewers Association doesn’t list it as a craft beer as it is owned by a larger brewer. Blue Moon on Thursday said the brand’s seasonal business is beginning to improve, and that growth comes ahead of Blue Moon’s plan to sell a new spring seasonal beer called First Peach Ale, a Belgium-style brown ale that Blue Moon founder and head brewmaster Keith Villa said was inspired by a trip to that European country.
Villa told Fortune that the new spring seasonal will hit shelves in January. “Like all craft brewers, we try to give our fans new tastes experiences every two to three years,” Villa said. “We’ve had a lot of great feedback.”