Molson Coors Beverage Company — 2024 Q1

Thanks, Bonnie. Look, I would say for the first quarter, our shipments certainly were higher than what we were expecting. We were obviously planning to ship higher than our brand of volumes. But our supply chain team did a tremendous job actually exceeding our expectations each and every week. As you know, we have a strike down in Fort Worth, and we have a contingency plan and the contingency plan is working better than we had originally expected.

Thanks, Andrea. Yes, a lot of questions in that question. So let me try and cover it off. And let me start with April, right? I mean, obviously, I understand the desire to monitor the industry on a week-by-week basis as we lap the upheaval, which we saw in 2023. We did highlight months ago that Q2 comps were going to have a lot of noise.

Well, thanks, Bill, and good morning to you. Look, I think I would draw your attention to the comment I just made around shipments, right? If you look at what happened in Q1, we were about 750,000 hectare liters shipped higher than brand volume. If you look at what we did last year, it was 100,000 hectoliters higher than brand volume. So we have 650,000 hectoliters above consumption, which we would expect to come back in the next 9 months, mostly, as I said, in the second half of the year.

Thanks, Peter. Yes, look, I mean, obviously, from an April point of view in the choppiness, I'll refer you to my response to maybe it was Andrea's question or Bonnie's, I'm not sure. But we're confident we can lap the results that we had from last year. We believe that we've created a new foundation on which to grow. Shares held for more than a year now. And our first quarter share gains are consistent with the gains that we experienced in the second half of 2023. Our core brands in the U.S. now hold around 15.6% volume share of the industry. That's up over 2 share points from the beginning of 2023.

Thanks, Steve. Look, from an overall industry point of view, I mean, we are more cautious, right? I mean the first 2 weeks of April were pretty grim from an industry point of view and did bounce back a little bit in the third week, but we're still down. So yes, I would say from an overall industry point of view, we are more cautious since CAGNY as more data has come in and particularly the first couple of weeks of April.

Thanks, Brian. Let's look at the U.K. I think that was the thrust of your earlier first part of your question. In the U.K., the consumer, as we've been saying for quite some time now has been quite resilient, particularly in the face of the severe inflation that we saw there. From an on-premise point of view, continues to perform well, right?

Thanks, Chris. Maybe I'll start with the, I guess, capital allocation question. So look, as with all capital allocation decisions, we've got models that we run our capital allocation decisions through to make sure that we are providing the most value. So in terms of the share repurchase program, I mean, we've got a sustained and opportunistic approach, and it is over 5 years. So again, that's just one part of our capital allocation strategy, and we'll use the models to make the right allocation decisions during a given period.

Thanks, Tracey. And the other part of your question, Chris, firstly, I wouldn't attribute the first few weeks of April's overall industry performance to weather. I don't think that we're seeing that at all. I mean, weather has not really been much of an issue. So I wouldn't pin it on that. It's more around consumer behavior and our belief that around consumer confidence, as I alluded to a little earlier.

Thanks, Lauren. Yes, our shipments were better than we expected in the first quarter. We very deliberately took our shipments up in the first quarter for 2 reasons: one, which was obviously preplanned and one we put into action in early February. So obviously, we wanted to make sure that we -- our distributors had sufficient inventory to meet the demands, which we knew are going to come from a shelf reset point of view and to continue fueling the momentum behind our brands.

Thanks for that question, Eric. I mean I'd point to a couple of things. One is we are very confident in our plans that we have behind not only our big core brands, but also our new innovations and our Above Premium portfolio, not only in the U.S. but also in Canada and also across the pond. So we're executing against the plan that we had, and we're spending the money behind our brands to maintain the structural shift that we've seen, and we like our plans. We think they're working. We think our Coors plan Choose Chill and Miller Lite's all stars programs have been very well received by the consumers.

Thanks, Robert. I think that the answer to that is that the retailers are confident and excited about our plans, and they're confident and excited about our velocities and have accordingly allocated us unprecedented amounts of extra space. That's the first point. I don't believe when all is said and done that we will see a large expansion in the space that is -- that has been allocated to beer as a category.

Thanks, Nadine. Look, I think from an overall industry point of view and drawing conclusions in the first 3 weeks of April, is not something that we're going to do, right? There's a lot of choppiness that's taking place in April. I think I covered that off on an earlier question around the timing of Easter, the massive dislocation, which we saw take place over several weeks in April from the Bud Light situation, the Eastern mismatch pricing and so on.

Thanks, Mike. Look, Tracey can take the cost side of that particular question. From an overall inventory levels, our inventory levels are very healthy. We -- We're, as I said, maintaining supply to our distributors. Our plan is ahead of where we would expect it to be on a week-to-week basis. So from that point of view, I don't expect any impact. Tracey, from a cost point of view?

Yes. Michael, as of now, the costs related to the contingency plan has not been material and we don't expect it to be material. So we do not expect it to be material for the balance of the year based on our current projections.

Thanks, Brett. Look, I think the work that we've done as a category is having more of a positive impact than a transitory one. So I would suggest that the work that we've done around flavors, non-alcohol beers, the moderate impact of the -- all of these things are positive for the overall beer industry, and I don't believe that those are transitory.

Yes. Thanks, Joe. Look, I think our move into beyond beer is much broader than spirits, right? And actually, I would say the bigger move that we've made is into both flavor with brands like Simply and Happy Thursday, coupled with our move into the non-allocation space and specifically with ZOA so the sort of non-ALC non-beer space with ZOA. I certainly believe that we need to have more than just ZOA in the non-alc space, and certainly, that can come from internal development as opposed to buy. I think from a spirits point of view, we did launch our own spirits -- our own spirits brands. And we did, as you say, buy a stake in Blue Run.

Thank you, operator. Greg?

All right. Thank you, operator. If you do really appreciate you joining us today. If you do have any additional questions, please follow up with me and Tracey and the IR team. And with that, we thank everybody for participating in today's call. Have a great day.