Molson Coors (TAP) Turns to Unique Flavors to Increase Profitability

Molson Coors (TAP) Turns to Unique Flavors to Increase Profitability

It is no secret that North American brewers are going through a rough patch of their own. Sales have been is a downtrend for some time now and it has caused brewing companies to step back and determine how they can revamp sales and get back in the game with higher profitability and growth margins.

Leading the charge is Molson Coors (NYSE:TAP) who just announced that it will be releasing ice-tea flavored beer. Molson Coors believes this could be the key to getting its sales back on track as well as getting its selling volume back to a more attractive level. The brewer also said that this new ice-tea beer will be released in the US as well as other ailing international areas and emerging markets.

At the management level, it appears that confidence is swirling around this new product. CEO of Molson Coors, Peter Swinburn recently told CNBC that he has full faith in this new product. The CEO went on to say that he believes this product could return the company to attractive growth. He cites that this customer-generated idea is just what the beer market needs to stop the downtrend of falling sales.

This is an interesting idea and concept, ice-tea flavored beer. It sounds like it is either going to be a hit or miss. Either consumers will jump on board or they won’t. At this point, however, any idea is a good idea. Beer sales are falling and it appears that nothing is going to stop that decline unless brewers come up with new ideas or new tactics around falling sales to get back to stable growth again.

Molson Coors has been taken the brunt of the beatings in North America. Boston Brewing Co (SAM) who is the maker of the Samuel Adams brand has been hurting as well but not the same extent Coors has. The difference is Sam Adams is more known as a higher end North American beer which is quite popular for gatherings. It is not as extensive as some of the international brewers but it isn’t low quality either. Maybe it would be beneficial for Molson Coors to take a page out of Boston Brewing Co’s book. They should make a beer that is higher end like the Sam Adams Boston Lager. They could call it Coors Premium or something along those lines.

The point is, people like to have quality beer. If Molson Coors was able to make a higher end beer, that could be a source of growth for the company and who knows, if the ice tea beer is a hit, will it be followed up with different flavored beers? Depending on how this first flavored beer goes, Molson Coors could be making a turn, a very profitable turn.


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