NEW YORK (AP) â¿¿ People cautious about the economy and their job prospects, particularly young drinkers who like light beers, bought less beer in the first three months of the year, Molson Coors Brewing Co. said Tuesday.
The company's net income in the first quarter rose 38 percent on a tax gain, but its adjusted results missed Wall Street forecasts as its costs rose, including most notably a 30 percent increase in marketing and general expenses.
The Denver-based company is courting drinkers with increased marketing and introductions of new brews like Molson Canadian 67 â¿¿ a low-calorie beer in Canada â¿¿ to keep them buying during the downturn.During the quarter, Molson Coors sold 3.8 percent less beer worldwide, including an 11 percent drop in its stronghold of Britain, although net sales rose 18 percent on price hikes and sales of higher-priced drinks. The company's U.S. business â¿¿ a joint venture called MillerCoors â¿¿ posted a 4 percent drop in sales to retailers as sales of mainstays like Miller Lite and Coors Light fell. Molson Coors blamed its worldwide decline on high unemployment and a slow recovery in consumer confidence. People have cut back on their trips out to bars and restaurants during the recession to save money, and they've traded down to less expensive brews when they do drink. CEO Peter Swinburn said the weak job environment is disproportionately hurting its core customer, men ages 21 to 30 who make up to $40,000 a year, who tend to drink premium light beer, such as Coors Light, but are having trouble in the job market. "Consumers who are employed are feeling pretty good, and those who are unemployed are feeling pretty bad," he told The Associated Press in an interview, noting beer sales declines have eased in recent weeks.