MOLSON COORS BEVERAGE CO — Call Transcript 2026

Well, welcome back everybody. Thank you. Oh, yeah. I know. Exclusions. Great. For our next session, I'm thrilled to welcome back Molson Coors Beverage Company. Rahul Goyal, the new President and Chief Executive Officer of Molson Coors is here with us, as well as Tracey Joubert, Chief Financial Officer. Rahul and Tracey, thank you very much for joining us, and welcome. Thank you. Thank you for having us. Great. I want to start, Rahul, with you. Just as you have now settled in, set a direction for the company. I guess, what are the maybe two or three things that you would want investors to, I guess, best understand about where Molson Coors is headed, and what may be different about this chapter versus the past? Yeah. No, thank you for that. I would say three main things I would probably leave everybody with. One is our portfolio. We're pretty clear-eyed about the category. We're pretty clear-eyed about where our portfolio stands, but it is a strong foundation. We know we have our core brands, our value brands that are scaled. They generate a lot of value. There's a strong connection with consumers, and we need to make sure they're healthy. On the other hand, we are transforming the portfolio. On the other hand, our Beyond Beer journey is early, but we are transforming that part of the portfolio. Portfolio is one piece I would leave everybody with. The second piece is around our, I would call out the operating model. What we're doing is different than what we have done in the past. Whether it's about our commercial execution, whether it's about our local focus, driving accountability closest to our customers, whether it's about our focus on cost savings and optimization. The cost program we announced, the optimization work we're doing across our business. Three, I would call out our investment in capabilities. That's both technology-related and investments-related, is how are we leveraging our investments to really drive a return for our business? The third one I'd call out is our balance sheet. If you look at our business, we are a pretty high cash yield business. We're doing a number of different things with our balance sheet. Whether it's investing in our business, whether it's returning money to shareholders, and also keeping our leverage in a way to be disciplined on the balance sheet. Steve, that's the big three things I'd flag for folks as they look at Molson Coors. Okay, great. If we focus on the portfolio first, you've mentioned essentially that all segments matter across: the core, the value brands, above premium, Beyond Beer. I guess, how do we think about the role that each one of those pieces play? Yeah. I would say the best way to look at our portfolio is in these four broad buckets that you called out. Core is scaled. Core matters. The Coors Light, the Miller Lite, Carling in the U.K., Molson Canadian in Canada. This is all about share. This is all about making sure we can keep and win share. These brands mean a lot in the core markets. It's connected with consumers and I know sometimes you look from the outside and like, "Well, can you find a way to grow it?" We have pockets where we have shown the way to grow this. Whether it's Canadian, the Molson trademark in Canada, whether it's Banquet in the U.S. Core matters and it's scale, it resonates with consumers. The value segment, I would say, is from two places. One is from where the economic context is for consumers. They are looking for different price points. Brands like Keystone, brands like High Life, these matters, and they may be a little bit more geographically focused, a little bit more local, but it is scaled. These are big brands and it drives a lot of utilization for our business. Both from a consumer perspective and from a brand perspective, this part of the portfolio matters. If you look at our above-premium agenda, we've done a decent job on that in beer in some of our other markets and not the U.S. In the U.K., in our European business, in Canada, we have a pretty good part of our portfolio in the above-premium part of the business. In the U.S., we are under-indexed. There, we just got to find scale. We've got to find a way to grow ourselves, in the above premium beer. The fourth part is Beyond Beer, which is all new. We've been in business for 240 years. We know beer. Beyond Beer, we've been in the business for less than four years. There it is about getting scaled. We started with probably less than 1% revenue. We're approaching 10% revenue. We got to get that big enough that that part of the business can grow faster than some of the other parts of our business. We're excited about having the ability to flex our business across four. Again, I go back to we're pretty clear-eyed about category challenges, but we like the portfolio we have. We know we can find a way to resonate that with consumers, and transform it with the parts of the business that are under indexed for us. Great. I want to drill a little bit deeper into each of those, but just on those category challenges. There's been a long-standing conversation amongst investors about the pressures on beverage alcohol broadly. And I guess your perspective on what may be structural changes that impact your strategy, as well as some kind of cyclical dynamics that are more here and now. Tracey, if you want to jump in on this, too. I'll start, Tracey. If you think about the broad consumer dynamics, right? The focus on health and wellness or changing consumer preferences with respect to the choices they're making around food and beverage. Those are longer-term issues. I think, again, we've been thinking about it, handling it, and it's on us to make sure we can navigate our portfolio to be ready for that consumer change. I share this as an anecdote. If you think about it, everybody says there's a big focus on health and wellness, and that is true, right? There you see us, a lot of our businesses and companies like us move towards the zero non-alcohol focus. Some of the fastest-growing segments in the Americas is high ABV. Right. You have consumers that talk about health and wellness, and that is important. On the other hand, you do have consumers that are looking for both flavor, value in high ABV. That part I would call things, Stephen, that we just have to make sure our portfolio is fit for the future, right. The other part, I think the overhang on this industry and the category has been, I would say, just volatility in the last 12, 18 months, which is just different macro issues, right. Whether it was last year, the impact on Hispanic consumers or low-income consumers. This year, the year started out okay, but getting into March and April, you had other macro issues. Again, Middle East, oil prices, pressure on consumers. I think that part, as a business, we are pretty resilient. We know we can navigate those volatile moments. I go back to the balance sheet. The team's done a great job of making sure we have a strong balance sheet. The structural part or the long-term effects is making sure we have a portfolio that's fit for the future. The volatility is, we recognize like every other company, we've got to make sure we can navigate through that carefully. Tracey. I think the only thing I'd add is when you look at when people are consuming alcohol, beer is still a major part of that consumption. It's really important for us to continue to make sure that that part of our portfolio is healthy, as Rahul has said. For people who aren't consuming alcohol, that's where we're moving to, whether it be zero-alcohol beer or the sort of RTD spirits side or any of the other sort of non-alc type beverages as we expand our portfolio to cater for those. Yeah. Okay, great. All right, let's dive into the various segments that we talked about a minute ago. On the core, you alluded to, you've got some brands like Banquet that have found growth. You have other brands, Miller Lite, that. Yeah need some energy. I guess as you kind of think about the core brand portfolio, what's essentially the playbook to get that overall portfolio in a stronger position going forward? No, I think if you look at our core, I like the way you were looking for the polite word on, Stephen, on Miller Lite. If you look at our core portfolio, again, I go back to this is a strong portfolio that resonates with consumers, right? We're starting from a place where these brands mean something for people. If I think about the Coors trademark, Coors Light, again, it's in a good place, and we got a lot of new action coming in, whether it's with the World Cup in the summer, whether it's a new campaign. If you look at the Coors brand family, it's doing what it's supposed to. It's holding share, and in some weeks, we gain share. Banquet, I use that as an example, right? Academically or intellectually, if you look at that brand, mainstream brand, full flavor beer, it should not grow. It's a 150-year-old brand. There is no logical reason for it to grow. It is growing, and it is growing because there's a way of connecting the brands to consumers. It's resonating in culture. For me, that gives us confidence. It gives us a playbook to say, how do we make sure our brands can really connect with consumers and grow? Miller Lite, to your point, it is definitely something. It just is taking a little bit more time, right? If you look at our share performance, that's where probably where we have some work to do. If you go deeper, it is a little bit more regional. If you think about the Great Lakes or the Midwest of America, that was old Miller land. That was where we were the strongest. We are the strongest. Highest share. That's where we've had a few new entrants, and the competitive context is harder. We're pretty energized going into summer, with the plans we have this year, whether it is America's 250th with Miller Lite, whether it's the music platform we have with Miller Lite, some of the local activation we're doing in particular regions to really make sure this brand is well supported. We recognize it's a competitive landscape, Stephen. It's going to be a competitive landscape. This is the way I know we talk about it internally. This is a battle and a fight week by week. It is about execution. It is about making sure our brands show up in the right way. If you think about our broadest way, our core portfolio in the States. I think we're pretty well set up to give a good fight this summer. If you look at our brands, again, in Canada, Coors Light continues to be the number one brand in Canada. The Molson trademark, again, has a new sense of energy around it. Core is important. Core needs to be healthy. I think we've got a lot of both good plans, investment behind our core for plan for this year. Okay. Is there a better way to judge progress than share? I would say I know that's the most visible way to measure share. Obviously, these brands and the health of these brands are important both in the context of the returns they create for our business and the way we think about utilization, et cetera. I know externally that becomes an easy way of thinking about progress, recognizing the volatility in the category. Okay. That's what I would use. Okay. If we flip to above premium, brands like Peroni and Blue Moon, those have had kind of spurts of promise and then followed by softer patches. Yeah. What are the opportunities to really improve consistency around the performance of that part of the portfolio? Yeah, if you think about above premium beer, again, I go back to the fact is we are starting from a lower index, right? If you think about total share of above premium in the U.S., we're much lower than what our complete portfolio is. I would say we've shown consistency in Peroni, right? If you think about it in the last, obviously six odd months, but even 12, 18 months, Peroni has shown consistent focus both from an investment perspective and also from a growth perspective. The work we have to do is on Blue Moon. The way I would break out Blue Moon is Blue Moon was built on premise. If you look at what's happened in the craft category, the craft category has gone through a bunch of volatility. The first job was to make sure, do we have the right execution and making sure we're building the brand back to what the basics are, which was on premise. I think that gives us confidence. If you look at the metrics, you look at the numbers, you look at our performance in the on-premise, I think that gives us confidence that we have the right proposition there. The question is how do we scale it beyond? That's where it goes into the craft category needs a little bit different ideas, a different way to engage with consumers. That's why you saw us lean into the non-alcoholic Blue Moon, which is again, doing really well. You saw us lean into higher ABV of Blue Moon because, again, the craft category with the volatility, it got noisy and Belgian White is important and we got to get Belgian White back to growth in the off-premise. Overall, if you look at it, in the family of brands, we feel pretty good. We've got a good game plan around Blue Moon. To your point, again, that's where we got to put points on the board. Right. Blue Moon, I get the fact that we have work to do to showcase the points on the board, but Peroni, I think we've driven with a lot more consistency. Yeah. You made a distinction there in part on versus off-premise, talking about Blue Moon. I guess taking a step back, you think about near-term trends and some of the softness we've seen in the off-premise data. What are you seeing? What are your planning assumptions around off versus on-premise for the balance of the year? Yeah, if you look at this mix of on and off in the Americas, that's still going to be in the 85-15 range, right? It plays a little bit differently by region, but broadly speaking, for us, the way we think about it is a couple of things. First is on-premise is again, where your ability to connect with consumers. Because they're paying a little bit higher prices versus the off-premise, therefore you need to make sure that your brands are stronger there. That gives us confidence. If you look at, I think, NielsenIQ data, et cetera, on-premise, all our big six brands are showing good growth. Okay. Good progress there. I think that gives us, again, a sense of confidence, making sure we're clear on how these brands connect to consumers. On-premise is doing better than off. It's a little bit of how do we translate that into the off-premise? Then I then translate that into occasions. Right. If you look at our business, if you look at the category, I know overhang about are people drinking, not drinking. The fact is folks are still drinking. This is not about abstinence. This is about making sure there's enough occasions where they're engaging with our products, our brands, and that's why the summer gets us excited. You probably heard this from multiple other folks. It just gives us more occasions to have our brands showcased. Yep. It gives us an ability to bring people together. That's what I would say is the part that I know we're all looking forward to. Yeah is some just added occasions this summer. Yep. Okay. Let's talk about Beyond Beer, where there's been a lot of activity, right? There's a lot of activity in your portfolio, with Fever-Tree and Topo Chico and now Monaco. I guess, we'll talk a little bit about Monaco specifically in a second, but I guess when you think about the overall portfolio you've constructed in Beyond Beer, how does it work together? How does that translate into more of a cohesive platform for growth? Yeah. No, I think I'd first start with, what is the role of Beyond Beer? If you think about our business, obviously, we are in great profit pools, and we want to make sure we can continue to grow our business in those large profit pools. America is growing. Consumers are making different choices on how they engage with our business, our brands. That's where the Beyond Beer platform is important. We started with probably less than 1% of our revenue in Beyond Beer. We're approaching about 10%. We want to make sure it is of scale. I think your question is, how does this all come together? We want to make sure if it's of scale, and the growth rate in Beyond Beer obviously should be higher than the growth in the rest of our business. Which is what we're getting to and I think we're demonstrating now. The question there is, what segments do we work in? How do we make sure that the execution in that, in Beyond Beer, is aligned to our broader enterprise? I think if you look at the choices we're making, you talked about Fever-Tree, you talked about Topo Chico, Monaco. These are brands and beverages and categories that are close to alcohol. Yeah. If you think about Fever-Tree, obviously it's a non-alc product, but it is close to alcohol. You can find it in the same place, in a grocery store or in a liquor store. The on-premise accounts are somewhat similar, but expands the universe base. Execution matters in that. In making sure that we can execute these parts of the portfolio along with the big infrastructure we have. That's the exciting part for us. Again, I used Topo Chico as an example in our partnership with Coke. We've had some good success initially. The flavor category was volatile. There needed to be a little bit of a step back and rethink, and now we're getting Topo Chico back into growth in a good way because we were able to expand innovation, bring that production in-house, use our facilities, drive value to the bottom line. We're not going to have 10, 15 brands. To your point of how does all of this work, we need to have a few scaled brands that can give us both the scale with retailers, scale with distributors, and our infrastructure. Then the only other part I'd call out is the good part with some of these brands that we've added to our business is we have brought in capabilities that we did not have. For example, in Fever-Tree, the Fever-Tree team in the United States had done a good job of executing in really high-end accounts. White tablecloth, on-premise accounts, where traditionally beer may not be sold. Guess what? Now our teams show up where we can sell Fever-Tree, and we can sell Peroni. It is a capability that we're adding to our business also, as we think about the Beyond Beer part of the portfolio. Got it. Anything, Tracey? No, that's good. Great. On Monaco, which is the newest addition to the portfolio. Yeah. I guess, maybe a little bit on what role that plays, and what gap that fills in the portfolio, and I guess, milestones, integration priorities over the next few quarters, and if there are any unique capabilities that brand or that the employees- Yeah who work for that brand bring to the table, that'd be great too. No, if you look at one of the pieces I would again zoom back out is the flavor category. Being that the flavor category is a pretty volatile one. We started the journey with seltzers, and then FMBs, and now RTD spirits. We knew we had a gap. We knew we needed to fill a gap in the RTD spirit space. One of the tricky parts in this is the volatility of brands. Yep. How do we make sure we're getting something that we can take as a base and a platform and really grow? The other part was important was scale. Scale relative obviously to our size, because if it's too small, it becomes too hard. Becomes too hard for our infrastructure, our business. You need to have some level of scale, which we can take and then grow from there. The other thing which is important is both top and bottom line, being a healthy business, it has to be accretive to our business. We're not going to deploy dollars just for the sake of chasing a top line. We've got to do that in a disciplined way. In a way, those were the criteria to think about. For us, what excited us about Monaco is that this business has been around since 12 to 14 years. Yeah. It's seen the way of the ups and downs. The team had done a great job of building this business on the back of singles. I think 70%+ of this business is singles in convenience and independent stores. That's the hard thing to do. Two, it is pretty concentrated in a few states. I think five states make up 65%+ of that business, which gives us a great platform to start with. To your question of brand proposition was right. It worked, again, with consumers that are a little bit different than our core demographics of what we sell to. It was a platform that was scaled with a very disciplined way of building a business that we could take and move on. The way we've done this is we've obviously closed it at the end of Q1 in April. We've integrated the people. We've brought on about 80-plus people from that team, because this is where in some of these brands, you do want to make sure it doesn't get lost in the big system. Yep. That there is enough time, attention, focus on making sure that we can keep the magic that exists with this brand. Job one right now is to make sure we can do the right transition. We say, "Don't drop a case." We also then want to make sure we get clear on our plans to take this business forward. The way I would think about it is in the markets where it is pretty well developed, we want to make sure we think about multiple channels, because if the team's done a really good job of convenience and liquor stores and singles, well, there's opportunity across different channels. On the other hand, we have the geography opportunity. Right. If it is concentrated in five states, how do we make sure we replicate that model? How are the dynamics that you're facing in those markets today different than maybe what we've described in the U.S., and how are you navigating more aggressive competitor pricing? Yeah specifically in the U.K., which I think is the big issue? Yeah, no, I think, if you look at our European business, the team's done a great job of growing the business, even from a pre-pandemic perspective, faster than I would say the Americas team. The top line, bottom line. If you break it down, I think, obviously in the U.K., it's been on the back of things like Madrí and premiumization and the portfolio transformation there. Central Europe also has done a good job of just core execution in a pretty volatile external context. I would say Central European business, still pretty strong. There's, again, continued macro issues that affect particular specific countries. Right. Local elections, local tax issues. It is a competitive context. In the broad scheme, we're holding and keep gaining share. Central European business in that regard. U.K. has just been a competitive landscape. I mean, it is a highly competitive market. I think the category is also a little bit under pressure. in the context of consumer sentiment. It is all about, I would say, just being competitive, and this is where Madrí is a little bit under pressure, but holding its own. Yeah. We have work to do in Carling. Yeah. The mainstream category has gotten pretty competitive, and I think you're seeing us lean into that, both from an innovation perspective. We obviously launch Carling Black Label. You're seeing us making sure we show up with Madrí for the summer, and with innovation with Madrí Limón. Yeah. Still investing. I think when the category is challenged overall, this is one market that's highly competitive and we're going to put it all on the field. Okay. Well, it was good news. I was in the U.K. last week. It was very warm, and there was plenty of Madrí. Yeah that I saw. No, I appreciate that. The team's done a good job. If you, again, look at capability and if you look at our history, we were pretty under-indexed in London and that area. I'm sure if you guys today go out, we have a pretty broad portfolio, above premium portfolio in the U.K. and in that region now, between with Madrí, with Monte Carlo, with obviously Coors. It is a capability and a muscle that is going to help us long- term. Okay. We've gotten this far and we haven't talked about costs. Yeah. Let's talk about costs, Tracey. We've been talking about costs for a while. I feel like every time we're on the stage, we're talking about aluminum and Midwest premium. The question still lingers. I guess, what are your latest kind of thoughts around the cost outlook? I know you're very well-protected for 2026, but I think a lot of investors are starting to think about what might be kind of building up as we look beyond the calendar year. I guess your plans and ability, confidence to mitigate some of those cost pressures. Yeah. I think the biggest cost pressure, the biggest headwind that we've faced this year, and it's not just us, but we've been talking about it for a long time, is the aluminum side of it. Aluminum and the Midwest premium in particular. You're right. For this year, we materially hedge, so we feel that we can mitigate any sort of further increases, et cetera, around the LME as well as the Midwest premium. As it relates to next year, we have said that it's really difficult to hedge the Midwest premium beyond sort of 12 months. Now, we do have hedges in place for next year. In terms of the volatility that we've seen, and the commodities continue to increase and the war hasn't helped, the war in Iran. There's levers that we can pull to, pricing being one of them. Premiumization, we've spoken about the portfolio. Just continuing to drive efficiencies in our breweries. We have invested capabilities in our breweries, which is helping to reduce costs and increase efficiencies as we bring more of our portfolio in-house, produced in-house, that's going to help margins. We also announced this cost savings program. $450 million over three years. You'll see that starting now this year. Last year, we made decisions end of last year in the Americas to take out about 400 roles in our Americas business. This year we announced some closures, a U.K. brewery closure. Also some U.K. cost savings, European cost savings as well, that's going to drive that. Drive the cost savings and just help mitigate some of the inflation that we're seeing. Continuing to invest behind our capabilities is certainly helping to offset some of the cost pressures that we're seeing. Yeah. On the $450 million, is there, I guess, the cadence, how that is likely to build, as we go through the year and then over the life of the program? Yeah. You'll see those cost savings starting now, in 2026. Again, a couple of those cost savings programs that I mentioned, we're starting to see that flow through. As we start investing more in capability, that's going to take a little bit longer as we invest in technology, et cetera. We'll see those coming, the technology investments, returns coming through next year and the year after. This year you're certainly going to see the headcount reduction, the closure of the brewery, et cetera. You'll see those cost savings. Okay. I would say evenly spread out, that $450 over the next three years. Yeah. Okay. In terms of the investments that you need to make to support the growth. Supply chain side, but also on the SG&A side. We continue to look at ways that we can make our marketing more efficient, return on marketing investments. We continue to take decisions around driving more to working dollars out of non-working dollars. You'll see all of that play through as well, all within the sort of guidance that we've set. Yeah. Just maybe to add to that, Stephen, I know you asked me about portfolio, but just to make this real, right? Obviously when we think about our big brands like Coors Light, Miller Lite, Banquet, you're going to see us show up in a different way. You're seeing that, right? Whether it's in TV, whether it's. in live sports, right. I think we have our biggest investment in live sports that we've done in the last 10 years this year. These brands have to show up in a different way. Just to pivot a little bit to our value segment and that level of investment there, we want to make sure those brands resonate also. Yeah type of investments we do Sure or how we do it, and the quantity is doing it. To Tracey's point, that's the pieces we are balancing, right? We talked about Beyond Beer, we are investing in people. We moved 90+ people with Fever-Tree into our organization. We have 80+ people that we've added with Monaco. We are investing in our business to make sure we're obviously being prudent and disciplined about managing a pretty volatile cost context. Investing in the business in the right way. Okay. I'll make one plug. If anybody has not seen the Keystone Apple, TikTok or Reel, take a look. I say that in jest, but it's an area about investing in technology, right? It's an ad, that is getting some energy, but the investment we did in that was appropriate for that type of part of our portfolio. It is making sure it's in the right investment, and as Tracey said, within the broad parameters we've laid out for this guidance. Okay, very good. I will check that out. Rahul, you mentioned at the start the strong balance sheet of the company and the cash generation of the company. From here, maybe we can both weigh on this, just Tracey, from a capital allocation perspective, the balance of capital return to shareholders, potential M&A, and maintaining that strong balance sheet. Rahul, what is the right deal from here? Because you mentioned you don't want 10, 15- Yeah What is the right deal, in the context both strategically and financially? I think we've done a really good job in terms of our balance sheets, and we've got this target out there to be around 2.5 times leverage, and I think we've been very disciplined on that. It's been really important. We just refinanced some debt, and having that investment grade was really good for the debt that we did raise. Because of our strong free cash flow generation, we are able to do a number of things. We continue to buy back our shares. We do think that our stock is a compelling investment. We do have the extended program out there. It's now up to $4 billion. We're ahead of where we would be if you just sort of divided it over five years. We continue to buy back shares. We've continued to increase our dividend. We have said that we want to sustainably grow the dividend, and we've done that. We've also been able to make the acquisition of Monaco through our operating cash. We'll continue to probably most importantly, invest behind our business, to make sure that we can continue to grow. Again, the balance sheet's in a good place. We have also made the commitment to continue to return cash to shareholders. Again, within our strong free cash flow, we've been able to do all of that. Yeah, I think if you think about I'd start with the portfolio, Stephen. What are the gaps we need to fill? Right? We had talked about RTDs earlier in the year and in February, and we filled that. I go back, and first job is to execute what we have, right? We have a broad portfolio, with core, with value, with above premium beers. We got to execute on that. We just added Fever-Tree last year, we added Monaco. We got to make sure organizationally we are executing against that. That's how I would first start with. Then we'll always be open to look at what opportunities come as we fill gaps in the portfolio. Again, we're not looking for another 10, 15 brands. What we need is a few scaled brands, that we know we can execute within our infrastructure. It then rounds out our portfolio to really make sure that the Beyond Beer space can really scale, right? Probably that's the space that makes sense. Beyond, if you think about beer, we continue to innovate in beer, right? Whether it's things like Keystone Apple or Keystone Ice, whether it is around Blue Moon. It's around Coors, right? We just launched Coors 0.0% in the Northeast. We will continue to innovate in parts of the portfolio where we know we have the right to do. Beyond Beer is probably where we probably need to deploy dollars over time. Okay. We're just about out of time here. I guess if there are one or two things or two or three things that you think investors should be most focused on, that you're most focused on in terms of the definition of success over the next 12 months, what would they be? I would go back to the three things I started with, right? We have a pretty broad portfolio, and as a company, I know we can get our business back to growth definitely even in volatile times. That's important. Two, we're operating very differently than we have in the past, that's a good way to keep a measure on us as a business. Three is, our focus on cash and balance sheet, right? We've been pretty disciplined about how we run this business. We're pretty disciplined about returning cash to shareholders, recognizing we still have to get our business back to growth. All right. Great way to end it. Rahul, Tracey, thank you so much. Thank you. Appreciate it. Thank you all for joining us. Thank you.

Speaker 2: Well, welcome back everybody. Thank you. Well, welcome back everybody. well welcome back everybody Thank you. thank you

Speaker 1: Oh, yeah. Oh, yeah. oh yeah

Speaker 2: I know. Exclusions. Great. For our next session, I'm thrilled to welcome back Molson Coors Beverage Company. Rahul Goyal, the new President and Chief Executive Officer of Molson Coors is here with us, as well as Tracey Joubert, Chief Financial Officer. Rahul and Tracey, thank you very much for joining us, and welcome. I know. i know Exclusions. exclusions Great. great For our next session, I'm thrilled to welcome back Molson Coors Beverage Company. for our next session i'm thrilled to welcome back molson coors beverage company Rahul Goyal, the new President and Chief Executive Officer of Molson Coors is here with us, as well as Tracey Joubert, Chief Financial Officer. rahul goyal the new president and chief executive officer of molson coors is here with us as well as tracey joubert chief financial officer Rahul and Tracey, thank you very much for joining us, and welcome. rahul and tracey thank you very much for joining us and welcome

Speaker 1: Thank you. Thank you for having us. Thank you. thank you Thank you for having us. thank you for having us

Speaker 2: Great. I want to start, Rahul, with you. Just as you have now settled in, set a direction for the company. I guess, what are the maybe two or three things that you would want investors to, I guess, best understand about where Molson Coors is headed, and what may be different about this chapter versus the past? Great. great I want to start, Rahul, with you. i want to start rahul with you Just as you have now settled in, set a direction for the company. just as you have now settled in set a direction for the company I guess, what are the maybe two or three things that you would want investors to, I guess, best understand about where Molson Coors is headed, and what may be different about this chapter versus the past? i guess what are the maybe two or three things that you would want investors to i guess best understand about where molson coors is headed and what may be different about this chapter versus the past

Speaker 1: Yeah. No, thank you for that. I would say three main things I would probably leave everybody with. One is our portfolio. We're pretty clear-eyed about the category. We're pretty clear-eyed about where our portfolio stands, but it is a strong foundation. We know we have our core brands, our value brands that are scaled. They generate a lot of value. There's a strong connection with consumers, and we need to make sure they're healthy. On the other hand, we are transforming the portfolio. On the other hand, our Beyond Beer journey is early, but we are transforming that part of the portfolio. Portfolio is one piece I would leave everybody with. The second piece is around our, I would call out the operating model. What we're doing is different than what we have done in the past. Yeah. yeah No, thank you for that. no thank you for that I would say three main things I would probably leave everybody with. i would say three main things i would probably leave everybody with One is our portfolio. one is our portfolio We're pretty clear-eyed about the category. we're pretty clear-eyed about the category We're pretty clear-eyed about where our portfolio stands, but it is a strong foundation. we're pretty clear-eyed about where our portfolio stands but it is a strong foundation We know we have our core brands, our value brands that are scaled. we know we have our core brands our value brands that are scaled They generate a lot of value. they generate a lot of value There's a strong connection with consumers, and we need to make sure they're healthy. there's a strong connection with consumers and we need to make sure they're healthy On the other hand, we are transforming the portfolio. on the other hand we are transforming the portfolio On the other hand, our Beyond Beer journey is early, but we are transforming that part of the portfolio. on the other hand our beyond beer journey is early but we are transforming that part of the portfolio Portfolio is one piece I would leave everybody with. portfolio is one piece i would leave everybody with The second piece is around our, I would call out the operating model. the second piece is around our i would call out the operating model What we're doing is different than what we have done in the past. what we're doing is different than what we have done in the past Whether it's about our commercial execution, whether it's about our local focus, driving accountability closest to our customers, whether it's about our focus on cost savings and optimization. The cost program we announced, the optimization work we're doing across our business. Three, I would call out our investment in capabilities. That's both technology-related and investments-related, is how are we leveraging our investments to really drive a return for our business? The third one I'd call out is our balance sheet. If you look at our business, we are a pretty high cash yield business. We're doing a number of different things with our balance sheet. Whether it's investing in our business, whether it's returning money to shareholders, and also keeping our leverage in a way to be disciplined on the balance sheet. Whether it's about our commercial execution, whether it's about our local focus, driving accountability closest to our customers, whether it's about our focus on cost savings and optimization. whether it's about our commercial execution whether it's about our local focus driving accountability closest to our customers whether it's about our focus on cost savings and optimization The cost program we announced, the optimization work we're doing across our business. the cost program we announced the optimization work we're doing across our business Three, I would call out our investment in capabilities. three i would call out our investment in capabilities That's both technology-related and investments-related, is how are we leveraging our investments to really drive a return for our business? that's both technology-related and investments-related is how are we leveraging our investments to really drive a return for our business The third one I'd call out is our balance sheet. the third one i'd call out is our balance sheet If you look at our business, we are a pretty high cash yield business. if you look at our business we are a pretty high cash yield business We're doing a number of different things with our balance sheet. we're doing a number of different things with our balance sheet Whether it's investing in our business, whether it's returning money to shareholders, and also keeping our leverage in a way to be disciplined on the balance sheet. whether it's investing in our business whether it's returning money to shareholders and also keeping our leverage in a way to be disciplined on the balance sheet Steve, that's the big three things I'd flag for folks as they look at Molson Coors. Steve, that's the big three things I'd flag for folks as they look at Molson Coors. steve that's the big three things i'd flag for folks as they look at molson coors

Speaker 2: Okay, great. If we focus on the portfolio first, you've mentioned essentially that all segments matter across: the core, the value brands, above premium, Beyond Beer. I guess, how do we think about the role that each one of those pieces play? Okay, great. okay great If we focus on the portfolio first, you've mentioned essentially that all segments matter across: the core, the value brands, above premium, Beyond Beer. if we focus on the portfolio first you've mentioned essentially that all segments matter across the core the value brands above premium beyond beer I guess, how do we think about the role that each one of those pieces play? i guess how do we think about the role that each one of those pieces play

Speaker 1: Yeah. I would say the best way to look at our portfolio is in these four broad buckets that you called out. Core is scaled. Core matters. The Coors Light, the Miller Lite, Carling in the U.K., Molson Canadian in Canada. This is all about share. This is all about making sure we can keep and win share. These brands mean a lot in the core markets. It's connected with consumers and I know sometimes you look from the outside and like, "Well, can you find a way to grow it?" We have pockets where we have shown the way to grow this. Whether it's Canadian, the Molson trademark in Canada, whether it's Banquet in the U.S. Core matters and it's scale, it resonates with consumers. The value segment, I would say, is from two places. One is from where the economic context is for consumers. Yeah. yeah I would say the best way to look at our portfolio is in these four broad buckets that you called out. i would say the best way to look at our portfolio is in these four broad buckets that you called out Core is scaled. core is scaled Core matters. core matters The Coors Light, the Miller Lite, Carling in the U.K., Molson Canadian in Canada. the coors light the miller lite carling in the u.k molson canadian in canada This is all about share. this is all about share This is all about making sure we can keep and win share. this is all about making sure we can keep and win share These brands mean a lot in the core markets. these brands mean a lot in the core markets It's connected with consumers and I know sometimes you look from the outside and like, "Well, can you find a way to grow it?" We have pockets where we have shown the way to grow this. it's connected with consumers and i know sometimes you look from the outside and like "well can you find a way to grow it?" we have pockets where we have shown the way to grow this Whether it's Canadian, the Molson trademark in Canada, whether it's Banquet in the U.S. whether it's canadian the molson trademark in canada whether it's banquet in the u.s Core matters and it's scale, it resonates with consumers. core matters and it's scale it resonates with consumers The value segment, I would say, is from two places. the value segment i would say is from two places One is from where the economic context is for consumers. one is from where the economic context is for consumers They are looking for different price points. Brands like Keystone, brands like High Life, these matters, and they may be a little bit more geographically focused, a little bit more local, but it is scaled. These are big brands and it drives a lot of utilization for our business. Both from a consumer perspective and from a brand perspective, this part of the portfolio matters. If you look at our above-premium agenda, we've done a decent job on that in beer in some of our other markets and not the U.S. In the U.K., in our European business, in Canada, we have a pretty good part of our portfolio in the above-premium part of the business. In the U.S., we are under-indexed. They are looking for different price points. they are looking for different price points Brands like Keystone, brands like High Life, these matters, and they may be a little bit more geographically focused, a little bit more local, but it is scaled. brands like keystone brands like high life these matters and they may be a little bit more geographically focused a little bit more local but it is scaled These are big brands and it drives a lot of utilization for our business. these are big brands and it drives a lot of utilization for our business Both from a consumer perspective and from a brand perspective, this part of the portfolio matters. both from a consumer perspective and from a brand perspective this part of the portfolio matters If you look at our above-premium agenda, we've done a decent job on that in beer in some of our other markets and not the U.S. if you look at our above-premium agenda we've done a decent job on that in beer in some of our other markets and not the u.s In the U.K., in our European business, in Canada, we have a pretty good part of our portfolio in the above-premium part of the business. in the u.k in our european business in canada we have a pretty good part of our portfolio in the above-premium part of the business In the U.S., we are under-indexed. in the u.s we are under-indexed There, we just got to find scale. We've got to find a way to grow ourselves, in the above premium beer. The fourth part is Beyond Beer, which is all new. We've been in business for 240 years. We know beer. Beyond Beer, we've been in the business for less than four years. There it is about getting scaled. We started with probably less than 1% revenue. We're approaching 10% revenue. We got to get that big enough that that part of the business can grow faster than some of the other parts of our business. We're excited about having the ability to flex our business across four. Again, I go back to we're pretty clear-eyed about category challenges, but we like the portfolio we have. There, we just got to find scale. there we just got to find scale We've got to find a way to grow ourselves, in the above premium beer. we've got to find a way to grow ourselves in the above premium beer The fourth part is Beyond Beer, which is all new. the fourth part is beyond beer which is all new We've been in business for 240 years. we've been in business for 240 years We know beer. we know beer Beyond Beer, we've been in the business for less than four years. beyond beer we've been in the business for less than four years There it is about getting scaled. there it is about getting scaled We started with probably less than 1% revenue. we started with probably less than 1% revenue We're approaching 10% revenue. we're approaching 10% revenue We got to get that big enough that that part of the business can grow faster than some of the other parts of our business. we got to get that big enough that that part of the business can grow faster than some of the other parts of our business We're excited about having the ability to flex our business across four. we're excited about having the ability to flex our business across four Again, I go back to we're pretty clear-eyed about category challenges, but we like the portfolio we have. again i go back to we're pretty clear-eyed about category challenges but we like the portfolio we have We know we can find a way to resonate that with consumers, and transform it with the parts of the business that are under indexed for us. We know we can find a way to resonate that with consumers, and transform it with the parts of the business that are under indexed for us. we know we can find a way to resonate that with consumers and transform it with the parts of the business that are under indexed for us

Speaker 2: Great. I want to drill a little bit deeper into each of those, but just on those category challenges. There's been a long-standing conversation amongst investors about the pressures on beverage alcohol broadly. And I guess your perspective on what may be structural changes that impact your strategy, as well as some kind of cyclical dynamics that are more here and now. Tracey, if you want to jump in on this, too. Great. great I want to drill a little bit deeper into each of those, but just on those category challenges. i want to drill a little bit deeper into each of those but just on those category challenges There's been a long-standing conversation amongst investors about the pressures on beverage alcohol broadly. And I guess your perspective on what may be structural changes that impact your strategy, as well as some kind of cyclical dynamics that are more here and now. there's been a long-standing conversation amongst investors about the pressures on beverage alcohol broadly. and i guess your perspective on what may be structural changes that impact your strategy as well as some kind of cyclical dynamics that are more here and now Tracey, if you want to jump in on this, too. tracey if you want to jump in on this too

Speaker 1: I'll start, Tracey. If you think about the broad consumer dynamics, right? The focus on health and wellness or changing consumer preferences with respect to the choices they're making around food and beverage. Those are longer-term issues. I think, again, we've been thinking about it, handling it, and it's on us to make sure we can navigate our portfolio to be ready for that consumer change. I share this as an anecdote. If you think about it, everybody says there's a big focus on health and wellness, and that is true, right? There you see us, a lot of our businesses and companies like us move towards the zero non-alcohol focus. Some of the fastest-growing segments in the Americas is high ABV. I'll start, Tracey. i'll start tracey If you think about the broad consumer dynamics, right? if you think about the broad consumer dynamics right The focus on health and wellness or changing consumer preferences with respect to the choices they're making around food and beverage. the focus on health and wellness or changing consumer preferences with respect to the choices they're making around food and beverage Those are longer-term issues. those are longer-term issues I think, again, we've been thinking about it, handling it, and it's on us to make sure we can navigate our portfolio to be ready for that consumer change. i think again we've been thinking about it handling it and it's on us to make sure we can navigate our portfolio to be ready for that consumer change I share this as an anecdote. i share this as an anecdote If you think about it, everybody says there's a big focus on health and wellness, and that is true, right? if you think about it everybody says there's a big focus on health and wellness and that is true right There you see us, a lot of our businesses and companies like us move towards the zero non-alcohol focus. there you see us a lot of our businesses and companies like us move towards the zero non-alcohol focus Some of the fastest-growing segments in the Americas is high ABV. some of the fastest-growing segments in the americas is high abv Right. You have consumers that talk about health and wellness, and that is important. On the other hand, you do have consumers that are looking for both flavor, value in high ABV. That part I would call things, Stephen, that we just have to make sure our portfolio is fit for the future, right. The other part, I think the overhang on this industry and the category has been, I would say, just volatility in the last 12, 18 months, which is just different macro issues, right. Whether it was last year, the impact on Hispanic consumers or low-income consumers. This year, the year started out okay, but getting into March and April, you had other macro issues. Again, Middle East, oil prices, pressure on consumers. I think that part, as a business, we are pretty resilient. We know we can navigate those volatile moments. Right. right You have consumers that talk about health and wellness, and that is important. you have consumers that talk about health and wellness and that is important On the other hand, you do have consumers that are looking for both flavor, value in high ABV. on the other hand you do have consumers that are looking for both flavor value in high abv That part I would call things, Stephen, that we just have to make sure our portfolio is fit for the future, right. that part i would call things stephen that we just have to make sure our portfolio is fit for the future right The other part, I think the overhang on this industry and the category has been, I would say, just volatility in the last 12, 18 months, which is just different macro issues, right. the other part i think the overhang on this industry and the category has been i would say just volatility in the last 12 18 months which is just different macro issues right Whether it was last year, the impact on Hispanic consumers or low-income consumers. whether it was last year the impact on hispanic consumers or low-income consumers This year, the year started out okay, but getting into March and April, you had other macro issues. this year the year started out okay but getting into march and april you had other macro issues Again, Middle East, oil prices, pressure on consumers. again middle east oil prices pressure on consumers I think that part, as a business, we are pretty resilient. i think that part as a business we are pretty resilient We know we can navigate those volatile moments. we know we can navigate those volatile moments I go back to the balance sheet. The team's done a great job of making sure we have a strong balance sheet. The structural part or the long-term effects is making sure we have a portfolio that's fit for the future. I go back to the balance sheet. i go back to the balance sheet The team's done a great job of making sure we have a strong balance sheet. the team's done a great job of making sure we have a strong balance sheet The structural part or the long-term effects is making sure we have a portfolio that's fit for the future. the structural part or the long-term effects is making sure we have a portfolio that's fit for the future The volatility is, we recognize like every other company, we've got to make sure we can navigate through that carefully. Tracey. The volatility is, we recognize like every other company, we've got to make sure we can navigate through that carefully. the volatility is we recognize like every other company we've got to make sure we can navigate through that carefully Tracey. tracey

Speaker 3: I think the only thing I'd add is when you look at when people are consuming alcohol, beer is still a major part of that consumption. It's really important for us to continue to make sure that that part of our portfolio is healthy, as Rahul has said. For people who aren't consuming alcohol, that's where we're moving to, whether it be zero-alcohol beer or the sort of RTD spirits side or any of the other sort of non-alc type beverages as we expand our portfolio to cater for those. I think the only thing I'd add is when you look at when people are consuming alcohol, beer is still a major part of that consumption. i think the only thing i'd add is when you look at when people are consuming alcohol beer is still a major part of that consumption It's really important for us to continue to make sure that that part of our portfolio is healthy, as Rahul has said. it's really important for us to continue to make sure that that part of our portfolio is healthy as rahul has said For people who aren't consuming alcohol, that's where we're moving to, whether it be zero-alcohol beer or the sort of RTD spirits side or any of the other sort of non-alc type beverages as we expand our portfolio to cater for those. for people who aren't consuming alcohol that's where we're moving to whether it be zero-alcohol beer or the sort of rtd spirits side or any of the other sort of non-alc type beverages as we expand our portfolio to cater for those

Speaker 2: Yeah. Okay, great. All right, let's dive into the various segments that we talked about a minute ago. On the core, you alluded to, you've got some brands like Banquet that have found growth. You have other brands, Miller Lite, that. Yeah. yeah Okay, great. okay great All right, let's dive into the various segments that we talked about a minute ago. all right let's dive into the various segments that we talked about a minute ago On the core, you alluded to, you've got some brands like Banquet that have found growth. on the core you alluded to you've got some brands like banquet that have found growth You have other brands, Miller Lite, that. you have other brands miller lite that

Speaker 1: Yeah Yeah yeah

Speaker 2: need some energy. I guess as you kind of think about the core brand portfolio, what's essentially the playbook to get that overall portfolio in a stronger position going forward? need some energy. need some energy I guess as you kind of think about the core brand portfolio, what's essentially the playbook to get that overall portfolio in a stronger position going forward? i guess as you kind of think about the core brand portfolio what's essentially the playbook to get that overall portfolio in a stronger position going forward

Speaker 1: No, I think if you look at our core, I like the way you were looking for the polite word on, Stephen, on Miller Lite. If you look at our core portfolio, again, I go back to this is a strong portfolio that resonates with consumers, right? We're starting from a place where these brands mean something for people. If I think about the Coors trademark, Coors Light, again, it's in a good place, and we got a lot of new action coming in, whether it's with the World Cup in the summer, whether it's a new campaign. If you look at the Coors brand family, it's doing what it's supposed to. It's holding share, and in some weeks, we gain share. Banquet, I use that as an example, right? No, I think if you look at our core, I like the way you were looking for the polite word on, Stephen, on Miller Lite. no i think if you look at our core i like the way you were looking for the polite word on stephen on miller lite If you look at our core portfolio, again, I go back to this is a strong portfolio that resonates with consumers, right? if you look at our core portfolio again i go back to this is a strong portfolio that resonates with consumers right We're starting from a place where these brands mean something for people. we're starting from a place where these brands mean something for people If I think about the Coors trademark, Coors Light, again, it's in a good place, and we got a lot of new action coming in, whether it's with the World Cup in the summer, whether it's a new campaign. if i think about the coors trademark coors light again it's in a good place and we got a lot of new action coming in whether it's with the world cup in the summer whether it's a new campaign If you look at the Coors brand family, it's doing what it's supposed to. if you look at the coors brand family it's doing what it's supposed to It's holding share, and in some weeks, we gain share. it's holding share and in some weeks we gain share Banquet, I use that as an example, right? banquet i use that as an example right Academically or intellectually, if you look at that brand, mainstream brand, full flavor beer, it should not grow. It's a 150-year-old brand. There is no logical reason for it to grow. It is growing, and it is growing because there's a way of connecting the brands to consumers. It's resonating in culture. For me, that gives us confidence. It gives us a playbook to say, how do we make sure our brands can really connect with consumers and grow? Academically or intellectually, if you look at that brand, mainstream brand, full flavor beer, it should not grow. academically or intellectually if you look at that brand mainstream brand full flavor beer it should not grow It's a 150-year-old brand. it's a 150-year-old brand There is no logical reason for it to grow. there is no logical reason for it to grow It is growing, and it is growing because there's a way of connecting the brands to consumers. it is growing and it is growing because there's a way of connecting the brands to consumers It's resonating in culture. it's resonating in culture For me, that gives us confidence. for me that gives us confidence It gives us a playbook to say, how do we make sure our brands can really connect with consumers and grow? it gives us a playbook to say how do we make sure our brands can really connect with consumers and grow Miller Lite, to your point, it is definitely something. It just is taking a little bit more time, right? If you look at our share performance, that's where probably where we have some work to do. If you go deeper, it is a little bit more regional. If you think about the Great Lakes or the Midwest of America, that was old Miller land. Miller Lite, to your point, it is definitely something. miller lite to your point it is definitely something It just is taking a little bit more time, right? it just is taking a little bit more time right If you look at our share performance, that's where probably where we have some work to do. if you look at our share performance that's where probably where we have some work to do If you go deeper, it is a little bit more regional. if you go deeper it is a little bit more regional If you think about the Great Lakes or the Midwest of America, that was old Miller land. if you think about the great lakes or the midwest of america that was old miller land That was where we were the strongest. We are the strongest. Highest share. That's where we've had a few new entrants, and the competitive context is harder. We're pretty energized going into summer, with the plans we have this year, whether it is America's 250th with Miller Lite, whether it's the music platform we have with Miller Lite, some of the local activation we're doing in particular regions to really make sure this brand is well supported. We recognize it's a competitive landscape, Stephen. It's going to be a competitive landscape. This is the way I know we talk about it internally. This is a battle and a fight week by week. It is about execution. It is about making sure our brands show up in the right way. That was where we were the strongest. that was where we were the strongest We are the strongest. we are the strongest Highest share. highest share That's where we've had a few new entrants, and the competitive context is harder. that's where we've had a few new entrants and the competitive context is harder We're pretty energized going into summer, with the plans we have this year, whether it is America's 250th with Miller Lite, whether it's the music platform we have with Miller Lite, some of the local activation we're doing in particular regions to really make sure this brand is well supported. we're pretty energized going into summer with the plans we have this year whether it is america's 250th with miller lite whether it's the music platform we have with miller lite some of the local activation we're doing in particular regions to really make sure this brand is well supported We recognize it's a competitive landscape, Stephen. we recognize it's a competitive landscape stephen It's going to be a competitive landscape. it's going to be a competitive landscape This is the way I know we talk about it internally. this is the way i know we talk about it internally This is a battle and a fight week by week. this is a battle and a fight week by week It is about execution. it is about execution It is about making sure our brands show up in the right way. it is about making sure our brands show up in the right way If you think about our broadest way, our core portfolio in the States. If you think about our broadest way, our core portfolio in the States. if you think about our broadest way our core portfolio in the states I think we're pretty well set up to give a good fight this summer. If you look at our brands, again, in Canada, Coors Light continues to be the number one brand in Canada. The Molson trademark, again, has a new sense of energy around it. Core is important. Core needs to be healthy. I think we're pretty well set up to give a good fight this summer. i think we're pretty well set up to give a good fight this summer If you look at our brands, again, in Canada, Coors Light continues to be the number one brand in Canada. if you look at our brands again in canada coors light continues to be the number one brand in canada The Molson trademark, again, has a new sense of energy around it. the molson trademark again has a new sense of energy around it Core is important. core is important Core needs to be healthy. core needs to be healthy I think we've got a lot of both good plans, investment behind our core for plan for this year. I think we've got a lot of both good plans, investment behind our core for plan for this year. i think we've got a lot of both good plans investment behind our core for plan for this year

Speaker 2: Okay. Is there a better way to judge progress than share? Okay. okay Is there a better way to judge progress than share? is there a better way to judge progress than share

Speaker 1: I would say I know that's the most visible way to measure share. Obviously, these brands and the health of these brands are important both in the context of the returns they create for our business and the way we think about utilization, et cetera. I know externally that becomes an easy way of thinking about progress, recognizing the volatility in the category. I would say I know that's the most visible way to measure share. i would say i know that's the most visible way to measure share Obviously, these brands and the health of these brands are important both in the context of the returns they create for our business and the way we think about utilization, et cetera. obviously these brands and the health of these brands are important both in the context of the returns they create for our business and the way we think about utilization et cetera I know externally that becomes an easy way of thinking about progress, recognizing the volatility in the category. i know externally that becomes an easy way of thinking about progress recognizing the volatility in the category

Speaker 2: Okay. Okay. okay

Speaker 1: That's what I would use. That's what I would use. that's what i would use

Speaker 2: Okay. If we flip to above premium, brands like Peroni and Blue Moon, those have had kind of spurts of promise and then followed by softer patches. Okay. okay If we flip to above premium, brands like Peroni and Blue Moon, those have had kind of spurts of promise and then followed by softer patches. if we flip to above premium brands like peroni and blue moon those have had kind of spurts of promise and then followed by softer patches

Speaker 1: Yeah. Yeah. yeah

Speaker 2: What are the opportunities to really improve consistency around the performance of that part of the portfolio? What are the opportunities to really improve consistency around the performance of that part of the portfolio? what are the opportunities to really improve consistency around the performance of that part of the portfolio

Speaker 1: Yeah, if you think about above premium beer, again, I go back to the fact is we are starting from a lower index, right? If you think about total share of above premium in the U.S., we're much lower than what our complete portfolio is. I would say we've shown consistency in Peroni, right? Yeah, if you think about above premium beer, again, I go back to the fact is we are starting from a lower index, right? yeah if you think about above premium beer again i go back to the fact is we are starting from a lower index right If you think about total share of above premium in the U.S., we're much lower than what our complete portfolio is. if you think about total share of above premium in the u.s we're much lower than what our complete portfolio is I would say we've shown consistency in Peroni, right? i would say we've shown consistency in peroni right If you think about it in the last, obviously six odd months, but even 12, 18 months, Peroni has shown consistent focus both from an investment perspective and also from a growth perspective. The work we have to do is on Blue Moon. The way I would break out Blue Moon is Blue Moon was built on premise. If you look at what's happened in the craft category, the craft category has gone through a bunch of volatility. The first job was to make sure, do we have the right execution and making sure we're building the brand back to what the basics are, which was on premise. I think that gives us confidence. If you think about it in the last, obviously six odd months, but even 12, 18 months, Peroni has shown consistent focus both from an investment perspective and also from a growth perspective. if you think about it in the last obviously six odd months but even 12 18 months peroni has shown consistent focus both from an investment perspective and also from a growth perspective The work we have to do is on Blue Moon. the work we have to do is on blue moon The way I would break out Blue Moon is Blue Moon was built on premise. the way i would break out blue moon is blue moon was built on premise If you look at what's happened in the craft category, the craft category has gone through a bunch of volatility. if you look at what's happened in the craft category the craft category has gone through a bunch of volatility The first job was to make sure, do we have the right execution and making sure we're building the brand back to what the basics are, which was on premise. the first job was to make sure do we have the right execution and making sure we're building the brand back to what the basics are which was on premise I think that gives us confidence. i think that gives us confidence If you look at the metrics, you look at the numbers, you look at our performance in the on-premise, I think that gives us confidence that we have the right proposition there. The question is how do we scale it beyond? That's where it goes into the craft category needs a little bit different ideas, a different way to engage with consumers. That's why you saw us lean into the non-alcoholic Blue Moon, which is again, doing really well. You saw us lean into higher ABV of Blue Moon because, again, the craft category with the volatility, it got noisy and Belgian White is important and we got to get Belgian White back to growth in the off-premise. Overall, if you look at it, in the family of brands, we feel pretty good. We've got a good game plan around Blue Moon. If you look at the metrics, you look at the numbers, you look at our performance in the on-premise, I think that gives us confidence that we have the right proposition there. if you look at the metrics you look at the numbers you look at our performance in the on-premise i think that gives us confidence that we have the right proposition there The question is how do we scale it beyond? the question is how do we scale it beyond That's where it goes into the craft category needs a little bit different ideas, a different way to engage with consumers. that's where it goes into the craft category needs a little bit different ideas a different way to engage with consumers That's why you saw us lean into the non-alcoholic Blue Moon, which is again, doing really well. that's why you saw us lean into the non-alcoholic blue moon which is again doing really well You saw us lean into higher ABV of Blue Moon because, again, the craft category with the volatility, it got noisy and Belgian White is important and we got to get Belgian White back to growth in the off-premise. you saw us lean into higher abv of blue moon because again the craft category with the volatility it got noisy and belgian white is important and we got to get belgian white back to growth in the off-premise Overall, if you look at it, in the family of brands, we feel pretty good. overall if you look at it in the family of brands we feel pretty good We've got a good game plan around Blue Moon. we've got a good game plan around blue moon To your point, again, that's where we got to put points on the board. To your point, again, that's where we got to put points on the board. to your point again that's where we got to put points on the board

Speaker 2: Right. Right. right

Speaker 1: Blue Moon, I get the fact that we have work to do to showcase the points on the board, but Peroni, I think we've driven with a lot more consistency. Blue Moon, I get the fact that we have work to do to showcase the points on the board, but Peroni, I think we've driven with a lot more consistency. blue moon i get the fact that we have work to do to showcase the points on the board but peroni i think we've driven with a lot more consistency

Speaker 2: Yeah. You made a distinction there in part on versus off-premise, talking about Blue Moon. I guess taking a step back, you think about near-term trends and some of the softness we've seen in the off-premise data. What are you seeing? What are your planning assumptions around off versus on-premise for the balance of the year? Yeah. yeah You made a distinction there in part on versus off-premise, talking about Blue Moon. you made a distinction there in part on versus off-premise talking about blue moon I guess taking a step back, you think about near-term trends and some of the softness we've seen in the off-premise data. i guess taking a step back you think about near-term trends and some of the softness we've seen in the off-premise data What are you seeing? what are you seeing What are your planning assumptions around off versus on-premise for the balance of the year? what are your planning assumptions around off versus on-premise for the balance of the year

Speaker 1: Yeah, if you look at this mix of on and off in the Americas, that's still going to be in the 85-15 range, right? It plays a little bit differently by region, but broadly speaking, for us, the way we think about it is a couple of things. First is on-premise is again, where your ability to connect with consumers. Because they're paying a little bit higher prices versus the off-premise, therefore you need to make sure that your brands are stronger there. That gives us confidence. If you look at, I think, NielsenIQ data, et cetera, on-premise, all our big six brands are showing good growth. Yeah, if you look at this mix of on and off in the Americas, that's still going to be in the 85-15 range, right? yeah if you look at this mix of on and off in the americas that's still going to be in the 85-15 range right It plays a little bit differently by region, but broadly speaking, for us, the way we think about it is a couple of things. it plays a little bit differently by region but broadly speaking for us the way we think about it is a couple of things First is on-premise is again, where your ability to connect with consumers. first is on-premise is again where your ability to connect with consumers Because they're paying a little bit higher prices versus the off-premise, therefore you need to make sure that your brands are stronger there. because they're paying a little bit higher prices versus the off-premise therefore you need to make sure that your brands are stronger there That gives us confidence. that gives us confidence If you look at, I think, NielsenIQ data, et cetera, on-premise, all our big six brands are showing good growth. if you look at i think nielseniq data et cetera on-premise all our big six brands are showing good growth

Speaker 2: Okay. Okay. okay

Speaker 1: Good progress there. I think that gives us, again, a sense of confidence, making sure we're clear on how these brands connect to consumers. On-premise is doing better than off. It's a little bit of how do we translate that into the off-premise? Then I then translate that into occasions. Good progress there. good progress there I think that gives us, again, a sense of confidence, making sure we're clear on how these brands connect to consumers. i think that gives us again a sense of confidence making sure we're clear on how these brands connect to consumers On-premise is doing better than off. on-premise is doing better than off It's a little bit of how do we translate that into the off-premise? it's a little bit of how do we translate that into the off-premise Then I then translate that into occasions. then i then translate that into occasions

Speaker 2: Right. Right. right

Speaker 1: If you look at our business, if you look at the category, I know overhang about are people drinking, not drinking. The fact is folks are still drinking. If you look at our business, if you look at the category, I know overhang about are people drinking, not drinking. if you look at our business if you look at the category i know overhang about are people drinking not drinking The fact is folks are still drinking. the fact is folks are still drinking This is not about abstinence. This is about making sure there's enough occasions where they're engaging with our products, our brands, and that's why the summer gets us excited. You probably heard this from multiple other folks. It just gives us more occasions to have our brands showcased. This is not about abstinence. this is not about abstinence This is about making sure there's enough occasions where they're engaging with our products, our brands, and that's why the summer gets us excited. this is about making sure there's enough occasions where they're engaging with our products our brands and that's why the summer gets us excited You probably heard this from multiple other folks. you probably heard this from multiple other folks It just gives us more occasions to have our brands showcased. it just gives us more occasions to have our brands showcased

Speaker 2: Yep. Yep. yep

Speaker 1: It gives us an ability to bring people together. That's what I would say is the part that I know we're all looking forward to. It gives us an ability to bring people together. it gives us an ability to bring people together That's what I would say is the part that I know we're all looking forward to. that's what i would say is the part that i know we're all looking forward to

Speaker 2: Yeah Yeah yeah

Speaker 1: is some just added occasions this summer. is some just added occasions this summer. is some just added occasions this summer

Speaker 2: Yep. Okay. Let's talk about Beyond Beer, where there's been a lot of activity, right? There's a lot of activity in your portfolio, with Fever-Tree and Topo Chico and now Monaco. I guess, we'll talk a little bit about Monaco specifically in a second, but I guess when you think about the overall portfolio you've constructed in Beyond Beer, how does it work together? How does that translate into more of a cohesive platform for growth? Yep. yep Okay. okay Let's talk about Beyond Beer, where there's been a lot of activity, right? let's talk about beyond beer where there's been a lot of activity right There's a lot of activity in your portfolio, with Fever-Tree and Topo Chico and now Monaco. there's a lot of activity in your portfolio with fever-tree and topo chico and now monaco I guess, we'll talk a little bit about Monaco specifically in a second, but I guess when you think about the overall portfolio you've constructed in Beyond Beer, how does it work together? i guess we'll talk a little bit about monaco specifically in a second but i guess when you think about the overall portfolio you've constructed in beyond beer how does it work together How does that translate into more of a cohesive platform for growth? how does that translate into more of a cohesive platform for growth

Speaker 1: Yeah. No, I think I'd first start with, what is the role of Beyond Beer? If you think about our business, obviously, we are in great profit pools, and we want to make sure we can continue to grow our business in those large profit pools. America is growing. Consumers are making different choices on how they engage with our business, our brands. That's where the Beyond Beer platform is important. We started with probably less than 1% of our revenue in Beyond Beer. We're approaching about 10%. We want to make sure it is of scale. Yeah. yeah No, I think I'd first start with, what is the role of Beyond Beer? no i think i'd first start with what is the role of beyond beer If you think about our business, obviously, we are in great profit pools, and we want to make sure we can continue to grow our business in those large profit pools. if you think about our business obviously we are in great profit pools and we want to make sure we can continue to grow our business in those large profit pools America is growing. america is growing Consumers are making different choices on how they engage with our business, our brands. consumers are making different choices on how they engage with our business our brands That's where the Beyond Beer platform is important. that's where the beyond beer platform is important We started with probably less than 1% of our revenue in Beyond Beer. we started with probably less than 1% of our revenue in beyond beer We're approaching about 10%. we're approaching about 10% We want to make sure it is of scale. we want to make sure it is of scale I think your question is, how does this all come together? We want to make sure if it's of scale, and the growth rate in Beyond Beer obviously should be higher than the growth in the rest of our business. I think your question is, how does this all come together? i think your question is how does this all come together We want to make sure if it's of scale, and the growth rate in Beyond Beer obviously should be higher than the growth in the rest of our business. we want to make sure if it's of scale and the growth rate in beyond beer obviously should be higher than the growth in the rest of our business Which is what we're getting to and I think we're demonstrating now. The question there is, what segments do we work in? How do we make sure that the execution in that, in Beyond Beer, is aligned to our broader enterprise? I think if you look at the choices we're making, you talked about Fever-Tree, you talked about Topo Chico, Monaco. These are brands and beverages and categories that are close to alcohol. Which is what we're getting to and I think we're demonstrating now. which is what we're getting to and i think we're demonstrating now The question there is, what segments do we work in? the question there is what segments do we work in How do we make sure that the execution in that, in Beyond Beer, is aligned to our broader enterprise? how do we make sure that the execution in that in beyond beer is aligned to our broader enterprise I think if you look at the choices we're making, you talked about Fever-Tree, you talked about Topo Chico, Monaco. i think if you look at the choices we're making you talked about fever-tree you talked about topo chico monaco These are brands and beverages and categories that are close to alcohol. these are brands and beverages and categories that are close to alcohol

Speaker 2: Yeah. Yeah. yeah

Speaker 1: If you think about Fever-Tree, obviously it's a non-alc product, but it is close to alcohol. You can find it in the same place, in a grocery store or in a liquor store. The on-premise accounts are somewhat similar, but expands the universe base. Execution matters in that. In making sure that we can execute these parts of the portfolio along with the big infrastructure we have. That's the exciting part for us. Again, I used Topo Chico as an example in our partnership with Coke. If you think about Fever-Tree, obviously it's a non-alc product, but it is close to alcohol. if you think about fever-tree obviously it's a non-alc product but it is close to alcohol You can find it in the same place, in a grocery store or in a liquor store. you can find it in the same place in a grocery store or in a liquor store The on-premise accounts are somewhat similar, but expands the universe base. the on-premise accounts are somewhat similar but expands the universe base Execution matters in that. execution matters in that In making sure that we can execute these parts of the portfolio along with the big infrastructure we have. in making sure that we can execute these parts of the portfolio along with the big infrastructure we have That's the exciting part for us. that's the exciting part for us Again, I used Topo Chico as an example in our partnership with Coke. again i used topo chico as an example in our partnership with coke We've had some good success initially. The flavor category was volatile. We've had some good success initially. we've had some good success initially The flavor category was volatile. the flavor category was volatile There needed to be a little bit of a step back and rethink, and now we're getting Topo Chico back into growth in a good way because we were able to expand innovation, bring that production in-house, use our facilities, drive value to the bottom line. We're not going to have 10, 15 brands. To your point of how does all of this work, we need to have a few scaled brands that can give us both the scale with retailers, scale with distributors, and our infrastructure. There needed to be a little bit of a step back and rethink, and now we're getting Topo Chico back into growth in a good way because we were able to expand innovation, bring that production in-house, use our facilities, drive value to the bottom line. there needed to be a little bit of a step back and rethink and now we're getting topo chico back into growth in a good way because we were able to expand innovation bring that production in-house use our facilities drive value to the bottom line We're not going to have 10, 15 brands. we're not going to have 10 15 brands To your point of how does all of this work, we need to have a few scaled brands that can give us both the scale with retailers, scale with distributors, and our infrastructure. to your point of how does all of this work we need to have a few scaled brands that can give us both the scale with retailers scale with distributors and our infrastructure Then the only other part I'd call out is the good part with some of these brands that we've added to our business is we have brought in capabilities that we did not have. For example, in Fever-Tree, the Fever-Tree team in the United States had done a good job of executing in really high-end accounts. Then the only other part I'd call out is the good part with some of these brands that we've added to our business is we have brought in capabilities that we did not have. then the only other part i'd call out is the good part with some of these brands that we've added to our business is we have brought in capabilities that we did not have For example, in Fever-Tree, the Fever-Tree team in the United States had done a good job of executing in really high-end accounts. for example in fever-tree the fever-tree team in the united states had done a good job of executing in really high-end accounts White tablecloth, on-premise accounts, where traditionally beer may not be sold. Guess what? Now our teams show up where we can sell Fever-Tree, and we can sell Peroni. White tablecloth, on-premise accounts, where traditionally beer may not be sold. white tablecloth on-premise accounts where traditionally beer may not be sold Guess what? guess what Now our teams show up where we can sell Fever-Tree, and we can sell Peroni. now our teams show up where we can sell fever-tree and we can sell peroni It is a capability that we're adding to our business also, as we think about the Beyond Beer part of the portfolio. It is a capability that we're adding to our business also, as we think about the Beyond Beer part of the portfolio. it is a capability that we're adding to our business also as we think about the beyond beer part of the portfolio

Speaker 2: Got it. Got it. got it

Speaker 1: Anything, Tracey? Anything, Tracey? anything tracey

Speaker 3: No, that's good. No, that's good. no that's good

Speaker 2: Great. On Monaco, which is the newest addition to the portfolio. Great. great On Monaco, which is the newest addition to the portfolio. on monaco which is the newest addition to the portfolio

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I guess, maybe a little bit on what role that plays, and what gap that fills in the portfolio, and I guess, milestones, integration priorities over the next few quarters, and if there are any unique capabilities that brand or that the employees- I guess, maybe a little bit on what role that plays, and what gap that fills in the portfolio, and I guess, milestones, integration priorities over the next few quarters, and if there are any unique capabilities that brand or that the employees- i guess maybe a little bit on what role that plays and what gap that fills in the portfolio and i guess milestones integration priorities over the next few quarters and if there are any unique capabilities that brand or that the employees-

Speaker 1: Yeah Yeah yeah

Speaker 2: who work for that brand bring to the table, that'd be great too. who work for that brand bring to the table, that'd be great too. who work for that brand bring to the table that'd be great too

Speaker 1: No, if you look at one of the pieces I would again zoom back out is the flavor category. Being that the flavor category is a pretty volatile one. We started the journey with seltzers, and then FMBs, and now RTD spirits. We knew we had a gap. We knew we needed to fill a gap in the RTD spirit space. One of the tricky parts in this is the volatility of brands. No, if you look at one of the pieces I would again zoom back out is the flavor category. no if you look at one of the pieces i would again zoom back out is the flavor category Being that the flavor category is a pretty volatile one. being that the flavor category is a pretty volatile one We started the journey with seltzers, and then FMBs, and now RTD spirits. we started the journey with seltzers and then fmbs and now rtd spirits We knew we had a gap. we knew we had a gap We knew we needed to fill a gap in the RTD spirit space. we knew we needed to fill a gap in the rtd spirit space One of the tricky parts in this is the volatility of brands. one of the tricky parts in this is the volatility of brands

Speaker 2: Yep. Yep. yep

Speaker 1: How do we make sure we're getting something that we can take as a base and a platform and really grow? The other part was important was scale. Scale relative obviously to our size, because if it's too small, it becomes too hard. Becomes too hard for our infrastructure, our business. You need to have some level of scale, which we can take and then grow from there. How do we make sure we're getting something that we can take as a base and a platform and really grow? how do we make sure we're getting something that we can take as a base and a platform and really grow The other part was important was scale. the other part was important was scale Scale relative obviously to our size, because if it's too small, it becomes too hard. scale relative obviously to our size because if it's too small it becomes too hard Becomes too hard for our infrastructure, our business. becomes too hard for our infrastructure our business You need to have some level of scale, which we can take and then grow from there. you need to have some level of scale which we can take and then grow from there The other thing which is important is both top and bottom line, being a healthy business, it has to be accretive to our business. We're not going to deploy dollars just for the sake of chasing a top line. We've got to do that in a disciplined way. In a way, those were the criteria to think about. For us, what excited us about Monaco is that this business has been around since 12 to 14 years. The other thing which is important is both top and bottom line, being a healthy business, it has to be accretive to our business. the other thing which is important is both top and bottom line being a healthy business it has to be accretive to our business We're not going to deploy dollars just for the sake of chasing a top line. we're not going to deploy dollars just for the sake of chasing a top line We've got to do that in a disciplined way. we've got to do that in a disciplined way In a way, those were the criteria to think about. in a way those were the criteria to think about For us, what excited us about Monaco is that this business has been around since 12 to 14 years. for us what excited us about monaco is that this business has been around since 12 to 14 years

Speaker 2: Yeah. Yeah. yeah

Speaker 1: It's seen the way of the ups and downs. The team had done a great job of building this business on the back of singles. I think 70%+ of this business is singles in convenience and independent stores. That's the hard thing to do. Two, it is pretty concentrated in a few states. I think five states make up 65%+ of that business, which gives us a great platform to start with. To your question of brand proposition was right. It worked, again, with consumers that are a little bit different than our core demographics of what we sell to. It was a platform that was scaled with a very disciplined way of building a business that we could take and move on. The way we've done this is we've obviously closed it at the end of Q1 in April. It's seen the way of the ups and downs. it's seen the way of the ups and downs The team had done a great job of building this business on the back of singles. the team had done a great job of building this business on the back of singles I think 70%+ of this business is singles in convenience and independent stores. i think 70%+ of this business is singles in convenience and independent stores That's the hard thing to do. that's the hard thing to do Two, it is pretty concentrated in a few states. two it is pretty concentrated in a few states I think five states make up 65%+ of that business, which gives us a great platform to start with. i think five states make up 65%+ of that business which gives us a great platform to start with To your question of brand proposition was right. to your question of brand proposition was right It worked, again, with consumers that are a little bit different than our core demographics of what we sell to. it worked again with consumers that are a little bit different than our core demographics of what we sell to It was a platform that was scaled with a very disciplined way of building a business that we could take and move on. it was a platform that was scaled with a very disciplined way of building a business that we could take and move on The way we've done this is we've obviously closed it at the end of Q1 in April. the way we've done this is we've obviously closed it at the end of q1 in april We've integrated the people. We've brought on about 80-plus people from that team, because this is where in some of these brands, you do want to make sure it doesn't get lost in the big system. We've integrated the people. we've integrated the people We've brought on about 80-plus people from that team, because this is where in some of these brands, you do want to make sure it doesn't get lost in the big system. we've brought on about 80-plus people from that team because this is where in some of these brands you do want to make sure it doesn't get lost in the big system

Speaker 2: Yep. Yep. yep

Speaker 1: That there is enough time, attention, focus on making sure that we can keep the magic that exists with this brand. Job one right now is to make sure we can do the right transition. We say, "Don't drop a case." We also then want to make sure we get clear on our plans to take this business forward. The way I would think about it is in the markets where it is pretty well developed, we want to make sure we think about multiple channels, because if the team's done a really good job of convenience and liquor stores and singles, well, there's opportunity across different channels. On the other hand, we have the geography opportunity. That there is enough time, attention, focus on making sure that we can keep the magic that exists with this brand. that there is enough time attention focus on making sure that we can keep the magic that exists with this brand Job one right now is to make sure we can do the right transition. job one right now is to make sure we can do the right transition We say, "Don't drop a case." We also then want to make sure we get clear on our plans to take this business forward. we say "don't drop a case." we also then want to make sure we get clear on our plans to take this business forward The way I would think about it is in the markets where it is pretty well developed, we want to make sure we think about multiple channels, because if the team's done a really good job of convenience and liquor stores and singles, well, there's opportunity across different channels. the way i would think about it is in the markets where it is pretty well developed we want to make sure we think about multiple channels because if the team's done a really good job of convenience and liquor stores and singles well there's opportunity across different channels On the other hand, we have the geography opportunity. on the other hand we have the geography opportunity

Speaker 2: Right. Right. right

Speaker 1: If it is concentrated in five states, how do we make sure we replicate that model? If it is concentrated in five states, how do we make sure we replicate that model? if it is concentrated in five states how do we make sure we replicate that model

Speaker 2: How are the dynamics that you're facing in those markets today different than maybe what we've described in the U.S., and how are you navigating more aggressive competitor pricing? How are the dynamics that you're facing in those markets today different than maybe what we've described in the U.S., and how are you navigating more aggressive competitor pricing? how are the dynamics that you're facing in those markets today different than maybe what we've described in the u.s and how are you navigating more aggressive competitor pricing

Speaker 1: Yeah Yeah yeah

Speaker 2: specifically in the U.K., which I think is the big issue? specifically in the U.K., which I think is the big issue? specifically in the u.k which i think is the big issue

Speaker 1: Yeah, no, I think, if you look at our European business, the team's done a great job of growing the business, even from a pre-pandemic perspective, faster than I would say the Americas team. The top line, bottom line. If you break it down, I think, obviously in the U.K., it's been on the back of things like Madrí and premiumization and the portfolio transformation there. Central Europe also has done a good job of just core execution in a pretty volatile external context. I would say Central European business, still pretty strong. There's, again, continued macro issues that affect particular specific countries. Yeah, no, I think, if you look at our European business, the team's done a great job of growing the business, even from a pre-pandemic perspective, faster than I would say the Americas team. yeah no i think if you look at our european business the team's done a great job of growing the business even from a pre-pandemic perspective faster than i would say the americas team The top line, bottom line. the top line bottom line If you break it down, I think, obviously in the U.K., it's been on the back of things like Madrí and premiumization and the portfolio transformation there. if you break it down i think obviously in the u.k it's been on the back of things like madrí and premiumization and the portfolio transformation there Central Europe also has done a good job of just core execution in a pretty volatile external context. central europe also has done a good job of just core execution in a pretty volatile external context I would say Central European business, still pretty strong. i would say central european business still pretty strong There's, again, continued macro issues that affect particular specific countries. there's again continued macro issues that affect particular specific countries

Speaker 2: Right. Right. right

Speaker 1: Local elections, local tax issues. It is a competitive context. Local elections, local tax issues. local elections local tax issues It is a competitive context. it is a competitive context In the broad scheme, we're holding and keep gaining share. Central European business in that regard. U.K. has just been a competitive landscape. I mean, it is a highly competitive market. I think the category is also a little bit under pressure. In the broad scheme, we're holding and keep gaining share. in the broad scheme we're holding and keep gaining share Central European business in that regard. central european business in that regard U.K. has just been a competitive landscape. u.k has just been a competitive landscape I mean, it is a highly competitive market. i mean it is a highly competitive market I think the category is also a little bit under pressure. i think the category is also a little bit under pressure in the context of consumer sentiment. It is all about, I would say, just being competitive, and this is where Madrí is a little bit under pressure, but holding its own. in the context of consumer sentiment. in the context of consumer sentiment It is all about, I would say, just being competitive, and this is where Madrí is a little bit under pressure, but holding its own. it is all about i would say just being competitive and this is where madrí is a little bit under pressure but holding its own

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We have work to do in Carling. We have work to do in Carling. we have work to do in carling

Speaker 2: Yeah. Yeah. yeah

Speaker 1: The mainstream category has gotten pretty competitive, and I think you're seeing us lean into that, both from an innovation perspective. We obviously launch Carling Black Label. The mainstream category has gotten pretty competitive, and I think you're seeing us lean into that, both from an innovation perspective. the mainstream category has gotten pretty competitive and i think you're seeing us lean into that both from an innovation perspective We obviously launch Carling Black Label. we obviously launch carling black label You're seeing us making sure we show up with Madrí for the summer, and with innovation with Madrí Limón. Yeah. Still investing. I think when the category is challenged overall, this is one market that's highly competitive and we're going to put it all on the field. You're seeing us making sure we show up with Madrí for the summer, and with innovation with Madrí Limón. you're seeing us making sure we show up with madrí for the summer and with innovation with madrí limón Yeah. yeah Still investing. still investing I think when the category is challenged overall, this is one market that's highly competitive and we're going to put it all on the field. i think when the category is challenged overall this is one market that's highly competitive and we're going to put it all on the field

Speaker 2: Okay. Well, it was good news. I was in the U.K. last week. It was very warm, and there was plenty of Madrí. Okay. okay Well, it was good news. well it was good news I was in the U.K. last week. i was in the u.k last week It was very warm, and there was plenty of Madrí. it was very warm and there was plenty of madrí

Speaker 1: Yeah Yeah yeah

Speaker 2: that I saw. that I saw. that i saw

Speaker 1: No, I appreciate that. The team's done a good job. If you, again, look at capability and if you look at our history, we were pretty under-indexed in London and that area. I'm sure if you guys today go out, we have a pretty broad portfolio, above premium portfolio in the U.K. and in that region now, between with Madrí, with Monte Carlo, with obviously Coors. It is a capability and a muscle that is going to help us long- term. No, I appreciate that. no i appreciate that The team's done a good job. the team's done a good job If you, again, look at capability and if you look at our history, we were pretty under-indexed in London and that area. if you again look at capability and if you look at our history we were pretty under-indexed in london and that area I'm sure if you guys today go out, we have a pretty broad portfolio, above premium portfolio in the U.K. and in that region now, between with Madrí, with Monte Carlo, with obviously Coors. i'm sure if you guys today go out we have a pretty broad portfolio above premium portfolio in the u.k and in that region now between with madrí with monte carlo with obviously coors It is a capability and a muscle that is going to help us long- term. it is a capability and a muscle that is going to help us long- term

Speaker 2: Okay. We've gotten this far and we haven't talked about costs. Okay. okay We've gotten this far and we haven't talked about costs. we've gotten this far and we haven't talked about costs

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Let's talk about costs, Tracey. We've been talking about costs for a while. I feel like every time we're on the stage, we're talking about aluminum and Midwest premium. The question still lingers. I guess, what are your latest kind of thoughts around the cost outlook? I know you're very well-protected for 2026, but I think a lot of investors are starting to think about what might be kind of building up as we look beyond the calendar year. I guess your plans and ability, confidence to mitigate some of those cost pressures. Let's talk about costs, Tracey. let's talk about costs tracey We've been talking about costs for a while. we've been talking about costs for a while I feel like every time we're on the stage, we're talking about aluminum and Midwest premium. i feel like every time we're on the stage we're talking about aluminum and midwest premium The question still lingers. the question still lingers I guess, what are your latest kind of thoughts around the cost outlook? i guess what are your latest kind of thoughts around the cost outlook I know you're very well-protected for 2026, but I think a lot of investors are starting to think about what might be kind of building up as we look beyond the calendar year. i know you're very well-protected for 2026 but i think a lot of investors are starting to think about what might be kind of building up as we look beyond the calendar year I guess your plans and ability, confidence to mitigate some of those cost pressures. i guess your plans and ability confidence to mitigate some of those cost pressures

Speaker 3: Yeah. I think the biggest cost pressure, the biggest headwind that we've faced this year, and it's not just us, but we've been talking about it for a long time, is the aluminum side of it. Aluminum and the Midwest premium in particular. You're right. For this year, we materially hedge, so we feel that we can mitigate any sort of further increases, et cetera, around the LME as well as the Midwest premium. As it relates to next year, we have said that it's really difficult to hedge the Midwest premium beyond sort of 12 months. Now, we do have hedges in place for next year. In terms of the volatility that we've seen, and the commodities continue to increase and the war hasn't helped, the war in Iran. Yeah. yeah I think the biggest cost pressure, the biggest headwind that we've faced this year, and it's not just us, but we've been talking about it for a long time, is the aluminum side of it. i think the biggest cost pressure the biggest headwind that we've faced this year and it's not just us but we've been talking about it for a long time is the aluminum side of it Aluminum and the Midwest premium in particular. aluminum and the midwest premium in particular You're right. you're right For this year, we materially hedge, so we feel that we can mitigate any sort of further increases, et cetera, around the LME as well as the Midwest premium. for this year we materially hedge so we feel that we can mitigate any sort of further increases et cetera around the lme as well as the midwest premium As it relates to next year, we have said that it's really difficult to hedge the Midwest premium beyond sort of 12 months. as it relates to next year we have said that it's really difficult to hedge the midwest premium beyond sort of 12 months Now, we do have hedges in place for next year. now we do have hedges in place for next year In terms of the volatility that we've seen, and the commodities continue to increase and the war hasn't helped, the war in Iran. in terms of the volatility that we've seen and the commodities continue to increase and the war hasn't helped the war in iran There's levers that we can pull to, pricing being one of them. Premiumization, we've spoken about the portfolio. Just continuing to drive efficiencies in our breweries. We have invested capabilities in our breweries, which is helping to reduce costs and increase efficiencies as we bring more of our portfolio in-house, produced in-house, that's going to help margins. We also announced this cost savings program. $450 million over three years. You'll see that starting now this year. Last year, we made decisions end of last year in the Americas to take out about 400 roles in our Americas business. This year we announced some closures, a U.K. brewery closure. Also some U.K. cost savings, European cost savings as well, that's going to drive that. Drive the cost savings and just help mitigate some of the inflation that we're seeing. There's levers that we can pull to, pricing being one of them. there's levers that we can pull to pricing being one of them Premiumization, we've spoken about the portfolio. premiumization we've spoken about the portfolio Just continuing to drive efficiencies in our breweries. just continuing to drive efficiencies in our breweries We have invested capabilities in our breweries, which is helping to reduce costs and increase efficiencies as we bring more of our portfolio in-house, produced in-house, that's going to help margins. we have invested capabilities in our breweries which is helping to reduce costs and increase efficiencies as we bring more of our portfolio in-house produced in-house that's going to help margins We also announced this cost savings program. $450 million over three years. we also announced this cost savings program $450 million over three years You'll see that starting now this year. you'll see that starting now this year Last year, we made decisions end of last year in the Americas to take out about 400 roles in our Americas business. last year we made decisions end of last year in the americas to take out about 400 roles in our americas business This year we announced some closures, a U.K. brewery closure. this year we announced some closures a u.k brewery closure Also some U.K. cost savings, European cost savings as well, that's going to drive that. also some u.k cost savings european cost savings as well that's going to drive that Drive the cost savings and just help mitigate some of the inflation that we're seeing. drive the cost savings and just help mitigate some of the inflation that we're seeing Continuing to invest behind our capabilities is certainly helping to offset some of the cost pressures that we're seeing. Continuing to invest behind our capabilities is certainly helping to offset some of the cost pressures that we're seeing. continuing to invest behind our capabilities is certainly helping to offset some of the cost pressures that we're seeing

Speaker 2: Yeah. On the $450 million, is there, I guess, the cadence, how that is likely to build, as we go through the year and then over the life of the program? Yeah. yeah On the $450 million, is there, I guess, the cadence, how that is likely to build, as we go through the year and then over the life of the program? on the $450 million is there i guess the cadence how that is likely to build as we go through the year and then over the life of the program

Speaker 3: Yeah. You'll see those cost savings starting now, in 2026. Again, a couple of those cost savings programs that I mentioned, we're starting to see that flow through. Yeah. yeah You'll see those cost savings starting now, in 2026. you'll see those cost savings starting now in 2026 Again, a couple of those cost savings programs that I mentioned, we're starting to see that flow through. again a couple of those cost savings programs that i mentioned we're starting to see that flow through As we start investing more in capability, that's going to take a little bit longer as we invest in technology, et cetera. We'll see those coming, the technology investments, returns coming through next year and the year after. This year you're certainly going to see the headcount reduction, the closure of the brewery, et cetera. You'll see those cost savings. As we start investing more in capability, that's going to take a little bit longer as we invest in technology, et cetera. as we start investing more in capability that's going to take a little bit longer as we invest in technology et cetera We'll see those coming, the technology investments, returns coming through next year and the year after. we'll see those coming the technology investments returns coming through next year and the year after This year you're certainly going to see the headcount reduction, the closure of the brewery, et cetera. this year you're certainly going to see the headcount reduction the closure of the brewery et cetera You'll see those cost savings. you'll see those cost savings

Speaker 2: Okay. Okay. okay

Speaker 3: I would say evenly spread out, that $450 over the next three years. I would say evenly spread out, that $450 over the next three years. i would say evenly spread out that $450 over the next three years

Speaker 2: Yeah. Okay. In terms of the investments that you need to make to support the growth. Yeah. yeah Okay. okay In terms of the investments that you need to make to support the growth. in terms of the investments that you need to make to support the growth

Speaker 3: Supply chain side, but also on the SG&A side. We continue to look at ways that we can make our marketing more efficient, return on marketing investments. We continue to take decisions around driving more to working dollars out of non-working dollars. You'll see all of that play through as well, all within the sort of guidance that we've set. Supply chain side, but also on the SG&A side. supply chain side but also on the sg&a side We continue to look at ways that we can make our marketing more efficient, return on marketing investments. we continue to look at ways that we can make our marketing more efficient return on marketing investments We continue to take decisions around driving more to working dollars out of non-working dollars. we continue to take decisions around driving more to working dollars out of non-working dollars You'll see all of that play through as well, all within the sort of guidance that we've set. you'll see all of that play through as well all within the sort of guidance that we've set

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Just maybe to add to that, Stephen, I know you asked me about portfolio, but just to make this real, right? Obviously when we think about our big brands like Coors Light, Miller Lite, Banquet, you're going to see us show up in a different way. You're seeing that, right? Whether it's in TV, whether it's. Just maybe to add to that, Stephen, I know you asked me about portfolio, but just to make this real, right? just maybe to add to that stephen i know you asked me about portfolio but just to make this real right Obviously when we think about our big brands like Coors Light, Miller Lite, Banquet, you're going to see us show up in a different way. obviously when we think about our big brands like coors light miller lite banquet you're going to see us show up in a different way You're seeing that, right? you're seeing that right Whether it's in TV, whether it's. whether it's in tv whether it's in live sports, right. I think we have our biggest investment in live sports that we've done in the last 10 years this year. These brands have to show up in a different way. Just to pivot a little bit to our value segment and that level of investment there, we want to make sure those brands resonate also. in live sports, right. in live sports right I think we have our biggest investment in live sports that we've done in the last 10 years this year. i think we have our biggest investment in live sports that we've done in the last 10 years this year These brands have to show up in a different way. these brands have to show up in a different way Just to pivot a little bit to our value segment and that level of investment there, we want to make sure those brands resonate also. just to pivot a little bit to our value segment and that level of investment there we want to make sure those brands resonate also

Speaker 2: Yeah Yeah yeah

Speaker 1: type of investments we do type of investments we do type of investments we do

Speaker 2: Sure Sure sure

Speaker 1: or how we do it, and the quantity is doing it. To Tracey's point, that's the pieces we are balancing, right? or how we do it, and the quantity is doing it. or how we do it and the quantity is doing it To Tracey's point, that's the pieces we are balancing, right? to tracey's point that's the pieces we are balancing right We talked about Beyond Beer, we are investing in people. We moved 90+ people with Fever-Tree into our organization. We have 80+ people that we've added with Monaco. We are investing in our business to make sure we're obviously being prudent and disciplined about managing a pretty volatile cost context. We talked about Beyond Beer, we are investing in people. we talked about beyond beer we are investing in people We moved 90+ people with Fever-Tree into our organization. we moved 90+ people with fever-tree into our organization We have 80+ people that we've added with Monaco. we have 80+ people that we've added with monaco We are investing in our business to make sure we're obviously being prudent and disciplined about managing a pretty volatile cost context. we are investing in our business to make sure we're obviously being prudent and disciplined about managing a pretty volatile cost context Investing in the business in the right way. Investing in the business in the right way. investing in the business in the right way

Speaker 2: Okay. Okay. okay

Speaker 1: I'll make one plug. If anybody has not seen the Keystone Apple, TikTok or Reel, take a look. I say that in jest, but it's an area about investing in technology, right? It's an ad, that is getting some energy, but the investment we did in that was appropriate for that type of part of our portfolio. It is making sure it's in the right investment, and as Tracey said, within the broad parameters we've laid out for this guidance. I'll make one plug. i'll make one plug If anybody has not seen the Keystone Apple, TikTok or Reel, take a look. if anybody has not seen the keystone apple tiktok or reel take a look I say that in jest, but it's an area about investing in technology, right? i say that in jest but it's an area about investing in technology right It's an ad, that is getting some energy, but the investment we did in that was appropriate for that type of part of our portfolio. it's an ad that is getting some energy but the investment we did in that was appropriate for that type of part of our portfolio It is making sure it's in the right investment, and as Tracey said, within the broad parameters we've laid out for this guidance. it is making sure it's in the right investment and as tracey said within the broad parameters we've laid out for this guidance

Speaker 2: Okay, very good. I will check that out. Rahul, you mentioned at the start the strong balance sheet of the company and the cash generation of the company. From here, maybe we can both weigh on this, just Tracey, from a capital allocation perspective, the balance of capital return to shareholders, potential M&A, and maintaining that strong balance sheet. Rahul, what is the right deal from here? Because you mentioned you don't want 10, 15- Okay, very good. okay very good I will check that out. i will check that out Rahul, you mentioned at the start the strong balance sheet of the company and the cash generation of the company. rahul you mentioned at the start the strong balance sheet of the company and the cash generation of the company From here, maybe we can both weigh on this, just Tracey, from a capital allocation perspective, the balance of capital return to shareholders, potential M&A, and maintaining that strong balance sheet. from here maybe we can both weigh on this just tracey from a capital allocation perspective the balance of capital return to shareholders potential m&a and maintaining that strong balance sheet Rahul, what is the right deal from here? rahul what is the right deal from here Because you mentioned you don't want 10, 15- because you mentioned you don't want 10 15-

Speaker 1: Yeah Yeah yeah

Speaker 2: What is the right deal, in the context both strategically and financially? What is the right deal, in the context both strategically and financially? what is the right deal in the context both strategically and financially

Speaker 3: I think we've done a really good job in terms of our balance sheets, and we've got this target out there to be around 2.5 times leverage, and I think we've been very disciplined on that. It's been really important. We just refinanced some debt, and having that investment grade was really good for the debt that we did raise. Because of our strong free cash flow generation, we are able to do a number of things. We continue to buy back our shares. We do think that our stock is a compelling investment. We do have the extended program out there. It's now up to $4 billion. We're ahead of where we would be if you just sort of divided it over five years. We continue to buy back shares. We've continued to increase our dividend. I think we've done a really good job in terms of our balance sheets, and we've got this target out there to be around 2.5 times leverage, and I think we've been very disciplined on that. i think we've done a really good job in terms of our balance sheets and we've got this target out there to be around 2.5 times leverage and i think we've been very disciplined on that It's been really important. it's been really important We just refinanced some debt, and having that investment grade was really good for the debt that we did raise. we just refinanced some debt and having that investment grade was really good for the debt that we did raise Because of our strong free cash flow generation, we are able to do a number of things. because of our strong free cash flow generation we are able to do a number of things We continue to buy back our shares. we continue to buy back our shares We do think that our stock is a compelling investment. we do think that our stock is a compelling investment We do have the extended program out there. we do have the extended program out there It's now up to $4 billion. it's now up to $4 billion We're ahead of where we would be if you just sort of divided it over five years. we're ahead of where we would be if you just sort of divided it over five years We continue to buy back shares. we continue to buy back shares We've continued to increase our dividend. we've continued to increase our dividend We have said that we want to sustainably grow the dividend, and we've done that. We've also been able to make the acquisition of Monaco through our operating cash. We'll continue to probably most importantly, invest behind our business, to make sure that we can continue to grow. Again, the balance sheet's in a good place. We have also made the commitment to continue to return cash to shareholders. Again, within our strong free cash flow, we've been able to do all of that. We have said that we want to sustainably grow the dividend, and we've done that. we have said that we want to sustainably grow the dividend and we've done that We've also been able to make the acquisition of Monaco through our operating cash. we've also been able to make the acquisition of monaco through our operating cash We'll continue to probably most importantly, invest behind our business, to make sure that we can continue to grow. we'll continue to probably most importantly invest behind our business to make sure that we can continue to grow Again, the balance sheet's in a good place. again the balance sheet's in a good place We have also made the commitment to continue to return cash to shareholders. we have also made the commitment to continue to return cash to shareholders Again, within our strong free cash flow, we've been able to do all of that. again within our strong free cash flow we've been able to do all of that

Speaker 1: Yeah, I think if you think about I'd start with the portfolio, Stephen. What are the gaps we need to fill? Right? We had talked about RTDs earlier in the year and in February, and we filled that. I go back, and first job is to execute what we have, right? We have a broad portfolio, with core, with value, with above premium beers. We got to execute on that. We just added Fever-Tree last year, we added Monaco. We got to make sure organizationally we are executing against that. That's how I would first start with. Then we'll always be open to look at what opportunities come as we fill gaps in the portfolio. Again, we're not looking for another 10, 15 brands. What we need is a few scaled brands, that we know we can execute within our infrastructure. Yeah, I think if you think about I'd start with the portfolio, Stephen. yeah i think if you think about i'd start with the portfolio stephen What are the gaps we need to fill? what are the gaps we need to fill Right? right We had talked about RTDs earlier in the year and in February, and we filled that. we had talked about rtds earlier in the year and in february and we filled that I go back, and first job is to execute what we have, right? i go back and first job is to execute what we have right We have a broad portfolio, with core, with value, with above premium beers. we have a broad portfolio with core with value with above premium beers We got to execute on that. we got to execute on that We just added Fever-Tree last year, we added Monaco. we just added fever-tree last year we added monaco We got to make sure organizationally we are executing against that. we got to make sure organizationally we are executing against that That's how I would first start with. that's how i would first start with Then we'll always be open to look at what opportunities come as we fill gaps in the portfolio. then we'll always be open to look at what opportunities come as we fill gaps in the portfolio Again, we're not looking for another 10, 15 brands. again we're not looking for another 10 15 brands What we need is a few scaled brands, that we know we can execute within our infrastructure. what we need is a few scaled brands that we know we can execute within our infrastructure It then rounds out our portfolio to really make sure that the Beyond Beer space can really scale, right? Probably that's the space that makes sense. Beyond, if you think about beer, we continue to innovate in beer, right? Whether it's things like Keystone Apple or Keystone Ice, whether it is around Blue Moon. It's around Coors, right? We just launched Coors 0.0% in the Northeast. We will continue to innovate in parts of the portfolio where we know we have the right to do. Beyond Beer is probably where we probably need to deploy dollars over time. It then rounds out our portfolio to really make sure that the Beyond Beer space can really scale, right? it then rounds out our portfolio to really make sure that the beyond beer space can really scale right Probably that's the space that makes sense. probably that's the space that makes sense Beyond, if you think about beer, we continue to innovate in beer, right? beyond if you think about beer we continue to innovate in beer right Whether it's things like Keystone Apple or Keystone Ice, whether it is around Blue Moon. whether it's things like keystone apple or keystone ice whether it is around blue moon It's around Coors, right? it's around coors right We just launched Coors 0.0% in the Northeast. we just launched coors 0.0% in the northeast We will continue to innovate in parts of the portfolio where we know we have the right to do. we will continue to innovate in parts of the portfolio where we know we have the right to do Beyond Beer is probably where we probably need to deploy dollars over time. beyond beer is probably where we probably need to deploy dollars over time

Speaker 2: Okay. We're just about out of time here. I guess if there are one or two things or two or three things that you think investors should be most focused on, that you're most focused on in terms of the definition of success over the next 12 months, what would they be? Okay. okay We're just about out of time here. we're just about out of time here I guess if there are one or two things or two or three things that you think investors should be most focused on, that you're most focused on in terms of the definition of success over the next 12 months, what would they be? i guess if there are one or two things or two or three things that you think investors should be most focused on that you're most focused on in terms of the definition of success over the next 12 months what would they be

Speaker 1: I would go back to the three things I started with, right? We have a pretty broad portfolio, and as a company, I know we can get our business back to growth definitely even in volatile times. That's important. Two, we're operating very differently than we have in the past, that's a good way to keep a measure on us as a business. Three is, our focus on cash and balance sheet, right? We've been pretty disciplined about how we run this business. We're pretty disciplined about returning cash to shareholders, recognizing we still have to get our business back to growth. I would go back to the three things I started with, right? i would go back to the three things i started with right We have a pretty broad portfolio, and as a company, I know we can get our business back to growth definitely even in volatile times. we have a pretty broad portfolio and as a company i know we can get our business back to growth definitely even in volatile times That's important. that's important Two, we're operating very differently than we have in the past, that's a good way to keep a measure on us as a business. two we're operating very differently than we have in the past that's a good way to keep a measure on us as a business Three is, our focus on cash and balance sheet, right? three is our focus on cash and balance sheet right We've been pretty disciplined about how we run this business. we've been pretty disciplined about how we run this business We're pretty disciplined about returning cash to shareholders, recognizing we still have to get our business back to growth. we're pretty disciplined about returning cash to shareholders recognizing we still have to get our business back to growth

Speaker 2: All right. Great way to end it. Rahul, Tracey, thank you so much. All right. all right Great way to end it. great way to end it Rahul, Tracey, thank you so much. rahul tracey thank you so much

Speaker 1: Thank you. Thank you. thank you

Speaker 2: Appreciate it. Thank you all for joining us. Thank you. Appreciate it. appreciate it Thank you all for joining us. thank you all for joining us Thank you. thank you