But if the world’s fourth biggest brewer wants to grow both sales and earnings for a third consecutive year in 2024, it needs to respond quickly to a shift in taste among young drinkers—and look beyond its conventional portfolio led by Coors Light and Miller Lite.

According to Molson Coors, Gen Z legal-drinking-age consumers—or “LDACs” as management calls them—are consuming 20% less alcohol than millennials did when they were the same age. A full 30% of the Gen Z cohort don’t drink alcohol at all, the company’s research shows. 

“That plays right into our overall strategy, where we’re moving beyond beer; we’re moving into non-alc products whether those are energy drinks, whether they are nonalcoholic beers,” CEO Gavin Hattersley told CNBC Mad Money host Jim Cramer on Wednesday.

The interview came after this week’s investor day, where Hattersley’s executive team unveiled their plans to defend their market share gains in light and premium beers that represent the bulk of its business, while pushing into new product categories. 

The nonalcoholic beer category today constitutes less than 1% of the market, but it is expanding at a double-digit rate. To better capture that growth, Molson Coors is launching a new alcohol-free version of its craft Belgian white-style brand of wheat beer, Blue Moon.

“One of our bigger innovations, which I think is going to be a big deal for us, is the launch of Blue Moon non-alc, which we’re bringing in December just in time for Dry January,” Hattersley told Cramer. 

Gen Z drinking less

Molson Coors is also expanding its partnership with the Coca-Cola Company to include a new Peace Hard Tea brand in addition to their spiked versions of the latter’s Simply line of juices. The brewer is aiming to reach Gen Z consumers who do drink alcohol with its Vizzy hard seltzer as well. 

But one key pillar of its strategy involves further developing a line of zero-sugar energy drinks called ZOA, which was cofounded by Dwayne “The Rock” Johnson. In September, Molson Coors struck a deal to expand its minority stake and remain the line’s exclusive distribution partner while gaining a seat on its board. 

To help Molson Coors better understand the tastes of the younger consumer group and the types of beverages that might appeal to them, its management has developed what they call a legal age Gen Z culture panel. 

“If we want to build what they want, we need to know what makes them tick,” chief commercial officer Michelle St. Jacques told investors on Tuesday.

According to Gallup’s Lydia Saad, young consumers deem moderate alcohol consumption too unhealthy. In a recent article, she also cited a shift from alcohol to marijuana, which is now legal in several states. 

But a major reason for the decline in young Americans who drink, Saad said, is that the number of Black, Hispanic, Asian or other racial minorities has doubled as a proportion of that age group over the past two decades. These groups have persistently been less likely to consume alcohol across all age groups than their white peers. 

“The overall drinking rate among 18- to 34-year-olds has naturally fallen as the proportion who are non-white has increased,” wrote Saad, Gallup’s director of U.S. social research.