Molson Coors to expand 'craft' beers in Canada to boost sales

Molson Coors wants to expand its portfolio of "craft" and flavoured beers in Canada to fend off the struggles facing its core brands and to lure new consumers who have been drinking other alcoholic beverages.

"The challenge for the beer industry is to make sure beer remains interesting, relevant, contemporary and whether that's traditional beers with traditional flavour profiles or new beers with new interesting flavour profiles, that's our job," new CEO Mark Hunter said Wednesday following the company's annual meeting.

He said Molson Coors, the world's fifth-largest brewer, is considering importing some of its international microbrewery beer brands to Canada, including Britain's Sharp's and Worthington.

While Molson Coors is open to acquisitions, tax breaks for small Canadian brewers make such buys less attractive, Hunter said in an interview.

U.S., Irish beers

Although its core brands remain the engine of Molson Coors' sales and profits, Hunter said the company has a strong global craft portfolio led by Blue Moon in the United States partially brewed in Montreal Sharp's and Ireland's Franciscan Well. In Canada, it relies mainly on Ontario's Creemore Springs and Granville Island Brewing of British Columbia.

"There are a number of opportunities we are currently evaluating either from Miller Coors in the U.S. or from our European business; Sharp's brewery in England and its flagship brand Doombar, as well as Ireland's Franciscan Well," according toWill Meijer, general manager of Molson Coors'Six Pints specialty beer company.

He acknowledged that the craft beer segment is a "crowded space" but said the company sees opportunities.

"We have a significant opportunity to gain market share in the growing craft segment by introducing new and innovative local brands and offerings," he said in an email to CBC News.

Ontario Craft Brewers said craft beers have been the fastest growing beer category in the province, expanding by more than 10 per cent annually, reaching $250 million in sales in 2013. The group defines craft beers as being made by small, independent and locally owned brewers that use traditional methods and natural ingredients.

Grapefruit-flavoured beer and brew cut with natural fruit juices are hot in Europe, and Hunter said the Canadian consumer is also interested in citrus and apple-flavoured varieties.

Beer remained the most popular alcoholic beverage in Canada last year, but it continued to lose ground to wine and spirits, according to Statistics Canada.

Beers sales flat

Beer sales were flat at $8.9 billion last year while ciders, coolers and other refreshment beverages grew 9.5 per cent to $693 million. Wine sales were up 2.3 per cent to $6.4 billion while spirits grew by 0.5 per cent to $4.8 billion.

Its latest quarterly report showsMolsonCoorsCanada sales volumedecreased 2.1 per cent inthe first quarter.

Molson Coors chairman Geoff Molson told shareholders that although beer remains the most popular alcoholic beverage in North America, consumers want something different than their predecessors.

"This evolution requires that we continually reinvent ourselves. We have no choice but to be innovative if we want to remain leaders," he said, marking the 10th anniversary of the merger between the two family brewers.

Molson Coors is Canada's second-largest brewer by volume and North America's oldest beer company. However, its market share has decreased to 37 per cent in 2014 from 42 per cent in 2010 as it lost the Modelo brands last year.

Labatt owner InBev led at 43 per cent while other brewers make up 21 per cent of the market, up from 17 per cent four years earlier.