After announcing a sales decline of 2% during its most recent earnings call, Molson Coors (NYSE: TAP) made a surprise announcement: It is changing its name from Molson Coors Brewing Co. to Molson Coors Beverage Co. This may seem like a minor change at first glance, but the underlying reason may say a lot about the future of the alcoholic beverage industry, specifically for the struggling U.S. segments of Molson Coors and its beer giant peer Anheuser Busch InBev NV (NYSE: BUD).
Earlier this year, the Beer Institute reported that beer's share of total alcohol servings fell to 49%, down by about 1% in 2018 -- right in line with AB InBev's U.S. revenue, which declined by 0.7% in the same year. Craft breweries, which according to the Brewers Association now encompass over 24% of the overall U.S. beer market, grew their volume by 4% and helped keep beer sales from sliding further. However, both AB InBev and Molson Coors are facing significant pressure in their traditional domestic beer revenue, with Q3 earnings highlighting the trend.
Image source: Molson Coors.