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Can Molson Coors' Premium Bets Make Up for Sluggish Beer Demand?
Read MoreHide Full Article
Key Takeaways
TAP pushes premiumization as beer volumes face inflation, demographic shifts and macro uncertainty.
Peroni's 25% Q3 volume jump shows above-premium growth potential and margin benefits within the portfolio.
TAP still faces pressure as premium brands remain a small share and core segments continue to decline.
Premiumization has emerged as one of Molson Coors Beverage Company’s (TAP - Free Report) most important strategic levers amid persistent softness in core beer demand, but whether those bets can fully offset volume pressure remains an open question. With U.S. beer consumption weighed down by inflation, shifting demographics and macro uncertainty, the company is leaning heavily into higher-margin brands to stabilize performance. This includes accelerating investments in above-premium labels, including Blue Moon and Peroni, expanding RTD (Ready to Drink) innovations, strengthening the positioning of key regional winners and enhancing its presence in high-growth categories.
Premium brands not only deliver higher margins, but they also tend to retain consumer loyalty even as spending becomes more selective. Molson Coors is pursuing a similar playbook: sharpened brand messaging, revamped packaging and targeted launches catering to evolving tastes — from flavor-forward beers to spirit-based RTDs.
Early signs indicate Molson Coors has attractive growth opportunities in the above-premium space. Peroni, which the company fully on-shored and began supporting with refreshed commercial plans, grew volumes by 25% in the third quarter of 2025, demonstrating the potential for premium brands to drive both revenue quality and market share. Beyond Peroni, TAP sees room to elevate other brands through new campaigns, broader distribution and innovation, particularly as premium beer and beyond-beer segments continue to outpace mainstream offerings in consumer preference. These gains support the view that premiumization can lift margins even in a declining category.
However, the challenge lies in scale. Premium brands represent a smaller portion of Molson Coors’ total volume, meaning strong performance in this segment may not fully offset softness elsewhere. The company’s volume declines have been concentrated in flavors and economy — two large segments where consumer pullback has been more pronounced. With the beer industry expected to contract 4-6% in the second half of 2025, premiumization faces a high bar as macro pressures continue to weigh on lower-income buyers and reduce trip frequency. For premium gains to translate into meaningful top-line stability, Molson Coors must also address headwinds in its core and value brands.
Ultimately, Molson Coors’ premium push strengthens mix and profitability, but its ability to fully counter slower core demand will hinge on sustained innovation, effective pricing and continued consumer trading-up trends in 2025 and beyond.
TAP’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have lost 1.6% in the past six months against the Zacks Beverages - Soft Drinks industry’s growth of 1.8%. However, the broader Consumer Staples sector declined 2.8% during the same period.
TAP Stock's Six-Month Performance
Image Source: Zacks Investment Research
Is TAP Stock a Value Play?
Molson Coors’ shares are currently trading at a forward 12-month price-to-earnings (P/E) multiple of 8.53X, at a discount compared with the industry’s average of 14.35X. The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the consumer staple sector.
TAP P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Better-Ranked Stocks
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. United Natural currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.02% and 187.3%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.
The Vita Coco Company (COCO - Free Report) produces and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. It presently flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Vita Coco’s 2025 sales and EPS indicates growth of 18% and 14.9%, respectively, from the prior-year reported levels. COCO delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It carries a Zacks Rank of 2 (Buy) at present.
The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 1.3% from the prior-year levels. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.
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Can Molson Coors' Premium Bets Make Up for Sluggish Beer Demand?
Key Takeaways
Premiumization has emerged as one of Molson Coors Beverage Company’s (TAP - Free Report) most important strategic levers amid persistent softness in core beer demand, but whether those bets can fully offset volume pressure remains an open question. With U.S. beer consumption weighed down by inflation, shifting demographics and macro uncertainty, the company is leaning heavily into higher-margin brands to stabilize performance. This includes accelerating investments in above-premium labels, including Blue Moon and Peroni, expanding RTD (Ready to Drink) innovations, strengthening the positioning of key regional winners and enhancing its presence in high-growth categories.
Premium brands not only deliver higher margins, but they also tend to retain consumer loyalty even as spending becomes more selective. Molson Coors is pursuing a similar playbook: sharpened brand messaging, revamped packaging and targeted launches catering to evolving tastes — from flavor-forward beers to spirit-based RTDs.
Early signs indicate Molson Coors has attractive growth opportunities in the above-premium space. Peroni, which the company fully on-shored and began supporting with refreshed commercial plans, grew volumes by 25% in the third quarter of 2025, demonstrating the potential for premium brands to drive both revenue quality and market share. Beyond Peroni, TAP sees room to elevate other brands through new campaigns, broader distribution and innovation, particularly as premium beer and beyond-beer segments continue to outpace mainstream offerings in consumer preference. These gains support the view that premiumization can lift margins even in a declining category.
However, the challenge lies in scale. Premium brands represent a smaller portion of Molson Coors’ total volume, meaning strong performance in this segment may not fully offset softness elsewhere. The company’s volume declines have been concentrated in flavors and economy — two large segments where consumer pullback has been more pronounced. With the beer industry expected to contract 4-6% in the second half of 2025, premiumization faces a high bar as macro pressures continue to weigh on lower-income buyers and reduce trip frequency. For premium gains to translate into meaningful top-line stability, Molson Coors must also address headwinds in its core and value brands.
Ultimately, Molson Coors’ premium push strengthens mix and profitability, but its ability to fully counter slower core demand will hinge on sustained innovation, effective pricing and continued consumer trading-up trends in 2025 and beyond.
TAP’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have lost 1.6% in the past six months against the Zacks Beverages - Soft Drinks industry’s growth of 1.8%. However, the broader Consumer Staples sector declined 2.8% during the same period.
TAP Stock's Six-Month Performance
Image Source: Zacks Investment Research
Is TAP Stock a Value Play?
Molson Coors’ shares are currently trading at a forward 12-month price-to-earnings (P/E) multiple of 8.53X, at a discount compared with the industry’s average of 14.35X. The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the consumer staple sector.
TAP P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Better-Ranked Stocks
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. United Natural currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.02% and 187.3%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.
The Vita Coco Company (COCO - Free Report) produces and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. It presently flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Vita Coco’s 2025 sales and EPS indicates growth of 18% and 14.9%, respectively, from the prior-year reported levels. COCO delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It carries a Zacks Rank of 2 (Buy) at present.
The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 1.3% from the prior-year levels. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.