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OPPORTUNITIES (1) Growth Beyond Beer – Low-Alcoholic and Non-Alcoholic Beers ■■

As discussed in the threats section, health conscious consumers are turning to low-alcoholic and non-alcoholic beers. AB InBev predicts 20% of its production volume will be low-alcoholic and non-alcoholic beers by 2025.

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Molson Coors is therefore broadening its portfolio to include a wider range of low-alcoholic and non-alcoholic beers (Alcohol Free Beers – “AFBs”) such as Coors Edge for consumers looking for healthier soft drinks or those consumers who cannot drink alcohol for religious reasons (Many of the Muslim-majority countries have alcohol prohibition). Interbrand suggests a strong parent brand can help to develop AFB, and we believe Molson Coors is in that position to develop strong AFB products within its portfolio.

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One interesting fact about AFBs is that they will generate significantly more revenue versus traditional beers because there is no alcohol/excise tax to pay.

Growth Beyond Beer – Brewed, Fermented or Distilled ■■

Molson Coors has also expanded its portfolio by investing in diversified brewed beverages such as the Bhakti Chai tea company and Clearly Kombucha.

Growth Beyond Beer – Hard Sparking/Spiked Seltzer ■■

One fast growing segment is the hard sparking/spiked seltzer category. The drink is a carbonated sparkling water spiked with nearly 5% alcohol by volume. It is becoming popular due to its low carbohydrate, sugar and calorie counts. Research firm L2 noted recently that "With remarkable

revenue growth of over 400% in just 18 months, hard seltzer rode a wave of success throughout 2018"*. The Company's Henry's Hard Sparkling is one of the top five brands in the US that saw tremendous growth in recent years.

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* https://www.l2inc.com/daily-insights/seltzer-goes-hard

Profile for Richard

Elevation Capital Research Annual 2018  

Elevation Capital Research Annual 2018