Boston, MA 05/13/2014 (wallstreetpr) – Molson Coors Brewing Company (NYSE:TAP) is starting to see some trouble around the corner as it witnesses a declining craze for its premium light beer. The company’s premium light beer, which has been the mainstay of the business for a long time, is seeing flat or declining sales.
Allure Of Craft Beers
As per consumer surveys, the decline in sales indicates the growing boredom of taste among people, who are getting attracted to craft beer now. According to a news piece that appeared in the Denver Post, Molson Coors Brewing Company (NYSE:TAP)’s Chairman, Peter H. Coors said that they are doing everything possible to keep up. Coors added that the biggest issue is with the on-premise sales. He described that a large percentage of bar owners are so charmed by the craft beers that they have started putting them in place of light beers, leading to a 50% of loss in volume.
Coors argues with compelling reasons as to why bar owners should prefer premium light brand over craft. He states that people tend to spend more time, that is 18 minutes longer on an average, when served with a light premium beer on tap, which eventually translates into bigger spending and better tips. While Molson Coors Brewing Company (NYSE:TAP) is certainly catching up with the trend, but Coors is baffled to see the shift in people’s choices. It is to be noted that the expensive craft beer market is growing at a pace of 7% annually, while premium light and economy beer market are recording a flat or declining growth.
First Quarter Results
Early last week, the company had posted its first quarter results, wherein it reported a significant increase in its net income from $28.5 million to $163.4 million year-over-year, leading to improvement in net income from $0.16 per share to $0.88 per share in the same period. The analysts’ had projected the earnings per share of $0.35 for the quarter. The growth in profit during the period was mainly due to cost reduction measures as Molson Coors Brewing Company (NYSE:TAP) reported a relatively flat revenue of $1.79 billion.
