Key Takeaways SAM said "beyond beer" now makes up most of its volume, making innovation central to category share gains.New products like Sun Cruiser and Twisted Tea extensions are gaining traction in RTD and flavored segments.Innovation is improving mix and margins, supporting reinvestment despite soft industry volume and competition.The Boston Beer Company Inc.’s (SAM) innovation pipeline has become central to its strategy as consumer demand shifts away from traditional beer toward flavored, functional an ...

Core Viewpoint - Asahi Group Holdings is acquiring Diageo's business in Kenya for $2.3 billion, which includes a 65% stake in East African Breweries and a 53.7% shareholding in UDVK, marking Asahi's first asset acquisition in the region [1][2] Group 1: Acquisition Details - The acquisition includes Diageo's majority stake in East African Breweries, which markets popular beer brands such as Tusker and Serengeti Lager [1] - Asahi aims to establish a foundation for medium- to long-term growth in Kenya and the East African market, driven by population growth and economic expansion [2] - Diageo has previously engaged in asset disposals in Africa, including the sale of its stake in Guinness Ghana Breweries for $81 million [2][3] Group 2: Strategic Implications - Diageo will enter into long-term licensing agreements and transitional service agreements with EABL, allowing EABL to produce Diageo's spirits brands under license [4] - The transaction is expected to deliver significant value for Diageo shareholders and strengthen its balance sheet, with a focus on maintaining a target leverage ratio of 2.5 to three times [6] - Asahi plans to maintain EABL's listing status and will not increase its stake beyond 65% [6] Group 3: Management Perspectives - Diageo's interim CEO indicated that the company could make substantial changes to its product portfolio through further asset disposals [5] - Asahi's CEO highlighted the high-quality nature of the acquired business, emphasizing its strong market position and commitment to sustainable growth and local economic development [7]

Core Insights - Premiumization is a key strategy for Molson Coors Beverage Company (TAP) to counteract declining beer demand, focusing on higher-margin brands to stabilize performance amid inflation and demographic shifts [1][4][8] - The company is investing in above-premium brands like Blue Moon and Peroni, and expanding Ready-to-Drink (RTD) innovations to enhance market presence [1][2][3] - Peroni experienced a 25% volume growth in Q3 2025, indicating strong potential for premium brands to improve revenue quality and market share [3][8] Industry Challenges - Premium brands currently represent a small portion of Molson Coors' total volume, making it difficult to fully offset declines in core segments, particularly in flavors and economy [4][8] - The beer industry is projected to contract by 4-6% in the second half of 2025, posing challenges for premiumization efforts as macroeconomic pressures affect lower-income consumers [4][5] Financial Performance - Molson Coors shares have decreased by 1.6% over the past six months, contrasting with a 1.8% growth in the Zacks Beverages - Soft Drinks industry [6] - The stock is trading at a forward P/E ratio of 8.53X, which is below the industry average of 14.35X, suggesting it is undervalued and may present a compelling investment opportunity [9]

Summary of Molson Coors Beverage Company Conference Call Company Overview - **Company**: Molson Coors Beverage Company (NYSE:TAP) - **New CEO**: Rahul Goyal, appointed on October 1st, 2025, with 24 years of experience at Molson Coors [2][5] Industry Context - **U.S. Beer Industry**: Facing significant challenges with industry volumes projected to decline by 46% this year [5] - **Macro Issues**: Inflation and other macroeconomic factors are impacting the business, similar to other Consumer Packaged Goods (CPG) companies [5][6] Key Challenges and Opportunities - **Challenges**: - Declining beer category volumes, with historical trends showing a consistent decline [9] - External pressures such as inflation and consumer health concerns [9][10] - **Opportunities**: - **Portfolio Strength**: A broad portfolio catering to various consumer needs, including core brands like Coors Light and Miller Lite [6][10] - **Infrastructure and Capabilities**: Strong distribution network and brewery infrastructure in profitable markets [7][56] - **Financial Health**: Improved balance sheet with strong free cash flow and lower leverage ratios [7][57] Growth Strategy - **Midterm Growth Outlook**: The company aims to stabilize and grow the beer category back to a positive growth range [9][11] - **Core Brands Focus**: Emphasis on maintaining and growing market share for core brands, with specific strategies for Miller Lite and Coors Light [12][15] - **Above Premium Segment**: Targeting an increase in the above premium mix from 27% to about one-third over the next few years, with successes in brands like Peroni [16][17] - **Economy Portfolio**: Plans to invest in economy brands like Miller High Life and Keystone Light to regain lost market share [23][25] International Operations - **Canada**: Positive market share growth despite a soft industry, with Coors Light being the number one brand [31][32] - **U.K.**: Continued premiumization efforts with brands like Madrà, despite competitive pressures [32][33] Cost Management - **COGS Pressure**: The Midwest Premium is a significant cost challenge, with prices rising from $0.20 to around $0.86-$0.87 [34][35] - **Cost Mitigation**: Implementing cost-saving programs and closing underperforming breweries to manage costs [37][39] Marketing and Brand Support - **Marketing Strategy**: Current marketing levels are deemed appropriate, with a focus on optimizing spend rather than increasing it significantly [40][41] - **Brand Support**: Continued investment in core brands and new brands like Fever-Tree to drive growth [44][45] M&A Strategy - **M&A Approach**: Open to larger transactions than the previous "String of Pearls" strategy, focusing on filling portfolio gaps, particularly in spirits-based RTDs [46][48] - **Capital Allocation**: Prioritizing a strong balance sheet while considering M&A opportunities and returning cash to shareholders through buybacks and dividends [53][54] Conclusion - **Key Takeaways**: The company emphasizes its diverse portfolio, strong infrastructure, and financial health as critical components for navigating current challenges and pursuing growth opportunities [57][58]

Financial Data and Key Metrics Changes - Third quarter consolidated net sales revenue decreased by 3.3% [19] - Underlying pre-tax income fell by 11.9% [19] - Underlying earnings per share declined by 7.2% [19] - A non-cash partial goodwill impairment charge of $3.6 billion was recorded [21] - Non-cash intangible asset impairment charges amounted to $274 million [21] Business Line Data and Key Metrics Changes - U.S. beer industry volume was down by 4.7% based on internal estimates [19] - U.S. volume share decreased by 40 basis points [19] - Contract brewing negatively impacted Americas financial volume by 450,000 hectoliters, equating to a 3 percentage point headwind [19] - EMEA and APAC volumes continued to be pressured due to soft market demand [19] Market Data and Key Metrics Changes - The macro environment has pressured demand across regions, particularly affecting lower-income and Hispanic consumers in the U.S. [8][9] - The company anticipates lower year-end U.S. distributor inventory levels compared to year-end 2024 [23] - The Midwest premium pricing has remained elevated, with costs expected to exceed the prior year by $40-$55 million [25] Company Strategy and Development Direction - The company aims to focus on building strong and scalable brands in both beer and beyond beer [10] - There is a commitment to premiumization, particularly in the above-premium segment, where the company is underindexed in the U.S. [12] - The company plans to implement structural changes to enhance agility and decision-making at the local level [16] - A corporate restructuring plan is in place to create a leaner organization, reducing salaried headcount by approximately 400 positions [17] Management's Comments on Operating Environment and Future Outlook - Management believes the current industry softness is cyclical rather than structural, with expectations for recovery as macro issues subside [9][44] - The company is committed to returning to growth, supported by a healthy balance sheet and strong free cash flow [9] - Future results are expected to take time, but there is confidence in the brand portfolio and strategic plans [18] Other Important Information - The company remains committed to its dividend and share repurchase program, viewing its stock as a compelling investment [18] - The guidance for 2025 has been reaffirmed, with expectations to come in at the low end of prior ranges for key metrics [22] Q&A Session Summary Question: What are the biggest opportunities and challenges ahead for the new CEO? - The new CEO highlighted the need to strengthen core brands and address share losses in the economy and flavor categories, while also focusing on premiumization opportunities [30] Question: Can you provide insights on the fourth quarter's top-line guidance? - The CFO indicated expectations for better performance in EMEA, APAC, and Canada, along with softer comps from contract brewing in the U.S. [32] Question: What are the pressures facing the beer category, and why is it considered cyclical? - Management noted that while there are structural issues, current pressures are largely due to macroeconomic factors, and they expect recovery as these issues are resolved [44] Question: How does the company plan to balance investments between beer and beyond beer? - The CEO emphasized the importance of supporting core beer brands while also seeking growth in the beyond beer segment, indicating a balanced approach to capital allocation [78] Question: What is the expected impact of the restructuring on the organization? - The restructuring aims to enhance agility and speed in decision-making, allowing for a more localized approach to market execution [76]

Financial Data and Key Metrics Changes - Third quarter consolidated net sales revenue decreased by 3.3% [19] - Underlying pre-tax income fell by 11.9% [19] - Underlying earnings per share declined by 7.2% [19] - The U.S. beer industry volume was down by 4.7% based on internal estimates [19] - A non-cash partial goodwill impairment charge of $3.6 billion was recorded [21] Business Line Data and Key Metrics Changes - U.S. volume share decreased by 40 basis points, with better performance in the on-premise channel compared to off-premise [19] - Contract brewing negatively impacted Americas financial volume by 450,000 hectoliters, equating to a 3 percentage point headwind [19] - EMEA and APAC volumes continued to be pressured due to soft market demand and heightened competition [19] Market Data and Key Metrics Changes - The macro environment has pressured demand across regions, particularly affecting lower-income and Hispanic consumers in the U.S. [8][9] - The company believes the current industry softness is cyclical rather than structural [9][44] Company Strategy and Development Direction - The company aims to focus on building strong and scalable brands in both Beer and Beyond Beer [10] - There is a commitment to premiumization, particularly in the U.S. market where the company is underindexed in above-premium segments [12][44] - The company plans to implement structural changes to enhance agility and decision-making at the local level [16][76] - A corporate restructuring plan is in place to create a leaner organization, reducing salaried headcount by approximately 400 positions or 9% [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by macroeconomic factors but remains confident in the company's ability to return to growth [5][9] - The company expects to reaffirm its 2025 guidance but anticipates results at the low end of prior ranges for key metrics [22] - Management emphasizes the importance of maintaining a healthy balance sheet and strong free cash flow while investing in growth opportunities [18] Other Important Information - The company is committed to its dividend and share repurchase program, viewing its stock as a compelling investment [18] - The company plans to redeploy savings from restructuring to invest in key brands and commercial capabilities [17][70] Q&A Session Questions and Answers Question: What are the biggest opportunities and challenges ahead for the new CEO? - The new CEO highlighted the need to strengthen core brands and address share losses in the economy and flavor categories while capitalizing on opportunities in above-premium segments [30] Question: Can you provide insights on the implied improvement for the fourth quarter? - The company expects better top-line performance in EMEA, APAC, and Canada, along with softer comps from contract brewing in the U.S. [32] Question: What pressures are facing the beer category, and why is it believed to be cyclical? - Management noted that the beer category has faced structural issues but believes current challenges are cyclical due to macroeconomic factors [44] Question: How does the company plan to balance investments between Beer and Beyond Beer? - The company intends to maintain a strong focus on beer while also investing in Beyond Beer to ensure it becomes a significant growth driver [78]

Financial Data and Key Metrics Changes - Third quarter consolidated net sales revenue decreased by 3.3% [23] - Underlying pretax income fell by 11.9% [23] - Underlying earnings per share declined by 7.2% [23] - U.S. beer industry volume was down by 4.7% based on internal estimates [23] - A non-cash partial goodwill impairment charge of $3.6 billion was recorded [26] Business Line Data and Key Metrics Changes - U.S. volume share decreased by 40 basis points, with better performance in the on-premise channel compared to off-premise [24] - Contract brewing was a 450,000 hectoliter headwind to Americas financial volume [24] - EMEA and APAC volumes continued to be pressured by soft market demand [25] Market Data and Key Metrics Changes - The macro environment has pressured demand across regions, particularly affecting lower-income and Hispanic consumers in the U.S. [9] - The Midwest premium pricing remained elevated but within expected ranges [25] Company Strategy and Development Direction - The company aims to focus on building strong and scalable brands in both beer and Beyond Beer [10] - Plans to prioritize investments in core and economy beer portfolios while transforming above-premium and Beyond Beer portfolios [11] - The company intends to increase focus on economy brands and capitalize on the success of brands like Banquet [12][13] - A corporate restructuring plan is being implemented to create a leaner organization and optimize cost structures [20] Management's Comments on Operating Environment and Future Outlook - Management believes the current industry softness is cyclical and expects to return to growth [9] - The company is committed to improving shareholder value and maintaining a disciplined capital allocation approach [21] - Management acknowledges the challenges posed by macroeconomic factors but remains confident in the company's ability to navigate these headwinds [9][21] Other Important Information - The company expects to reaffirm its 2025 guidance, anticipating declines in key metrics [27] - Year-end U.S. distributor inventory levels are expected to be lower compared to year-end 2024 [28] Q&A Session Summary Question: What are the biggest opportunities and challenges ahead for the new CEO? - The new CEO highlighted the importance of listening to employees and customers, focusing on strengthening core brands and addressing gaps in the economy and flavor categories [37][39] Question: Can you provide insights on the implied improvement for Q4? - Management expects better top-line performance in EMEA, APAC, and Canada, along with lower G&A expenses due to reduced incentive compensation [40][41] Question: What are the pressures facing the beer category, and why is it considered cyclical? - Management noted that the beer category has faced structural issues but believes the current challenges are largely cyclical due to macroeconomic factors [52][53] Question: How does the company plan to address the upcoming bond maturity? - The company will review its debt as it approaches maturity, maintaining a focus on its leverage ratio [68] Question: What is the outlook for the economy portfolio? - The management emphasized the need to support the economy portfolio through appropriate marketing, innovation, and regional strategies [96]

Financial Data and Key Metrics Changes - Consolidated net sales revenue decreased by 3.3% in Q3 2025 [18] - Underlying pre-tax income declined by 11.9% [18] - Underlying earnings per share fell by 7.2% [18] - The U.S. beer industry volume was down by 4.7% based on internal estimates [18] - A non-cash partial goodwill impairment charge of $3.6 billion was recorded [19] Business Line Data and Key Metrics Changes - U.S. volume share decreased by 40 basis points, with better performance in the on-premise channel compared to off-premise [18] - Contract brewing was a 450,000 hectoliter headwind to the Americas financial volume [18] - Volume in the Americas and APAC continued to be pressured across all regions due to soft market demand [18] Market Data and Key Metrics Changes - The macro environment in Europe contributed to continued industry softness, impacting demand [7] - The Midwest premium pricing remained elevated, with marketing expenses increasing while G&A decreased due to lower incentive compensation [18] Company Strategy and Development Direction - The company aims to focus on building strong and scalable brands in both beer and beyond beer [8] - There is a commitment to premiumization, particularly in the above-premium segment, where the company is underindexed in the U.S. [10] - The company plans to invest in core and economy beer portfolios while transforming above-premium and beyond beer portfolios [8][10] - A corporate restructuring plan is being implemented to create a leaner organization and reinvest in key brands and capabilities [15][16] Management's Comments on Operating Environment and Future Outlook - Management believes the current industry softness is cyclical and expects a return to growth as macro issues are resolved [7][42] - The company is committed to returning cash to shareholders while also looking for scalable and accretive M&A opportunities [16][48] - Management expressed confidence in the company's ability to navigate near-term challenges and return to top and bottom-line growth [7][17] Other Important Information - The company expects to reaffirm its 2025 guidance but anticipates coming in at the low end of prior ranges for key metrics [20] - Year-end U.S. distributor inventory levels are expected to be lower compared to year-end 2024 [21] Q&A Session Questions and Answers Question: What are the biggest opportunities and challenges ahead for the new CEO? - The new CEO highlighted the need to strengthen core brands and address share losses in the economy and flavor categories while recognizing the strong foundation of the company [28] Question: Can you provide insights on the implied improvement for Q4? - Management expects better top-line performance in the Americas, APAC, and Canada, driven by lapping softer comps from contract brewing [31] Question: How do you view the pressures facing the beer category? - Management believes the current pressures are cyclical, influenced by macroeconomic factors, and expects a return to pre-2025 levels once these issues are resolved [42] Question: What is the company's approach to capital deployment and M&A? - The company aims to be disciplined in capital deployment, focusing on accretive deals that fill portfolio gaps while maintaining a strong balance sheet [48] Question: How will the restructuring improve agility and speed? - The restructuring is designed to bring leadership closer to market execution, enabling quicker decision-making and resource allocation [70]

Core Points - Asahi Group Holdings is facing a significant operational disruption due to a cyberattack that has halted production in most of its 30 facilities in Japan since September 29, 2025 [1][2] - The company reported first-half 2025 sales of 1,360 billion yen, approximately $9.24 billion, and its stock price has declined over 6.5% in the past five days and about 7% over the past year [3] - Japanese retailers, including Family Mart and 7-Eleven, have warned of low supply of Asahi products, including Asahi Super Dry beer, due to the suspension of orders and shipments [8][9] Company Operations - The cyberattack has led to the suspension of order and shipment operations in Japan, as well as a pause in call center activities, including customer service [2] - Asahi Group Holdings confirmed that there has been no leakage of customer data, but it has not provided an estimated timeline for recovery from the system failure [2] Market Impact - The disruption in production and supply chain is expected to affect the availability of Asahi's products in retail stores, leading to potential shortages [8][9] - The company's stock performance reflects investor concerns, with a notable decline in share value over the recent period [3]

Core Thesis - Molson Coors Beverage Company (TAP) is viewed positively due to its attractive valuation, strong brand portfolio, and strategic initiatives aimed at debt reduction and cash flow generation [1][4][5] Valuation and Financial Metrics - As of September 17th, TAP's share price was $46.86, with trailing and forward P/E ratios of 9.24 and 8.04 respectively [1] - The stock recently traded near $47.50, identified as a strategic entry point, with potential gains of approximately 13.7% over four months, including dividends [2] - TAP has an expected near-term GAAP earnings yield of 11%, which increases to over 13% when accounting for $200 million of goodwill amortization [2] Debt Management and Cash Flow - The company successfully reduced leverage to a 2.5x EBITDA target for 2024 and has initiated aggressive share buybacks while committing to increasing dividends [3] - Low operating leverage supports cash flow stability, providing insulation from potential revenue shortfalls [3] Brand Strength and Growth Potential - TAP's brand portfolio includes well-known names such as Coors, Miller Lite, and Blue Moon, and the company is making strategic investments in emerging beverage segments like hard seltzers [3] - The combination of strong brand equity and ongoing strategic initiatives positions TAP for growth [4] Market Position and Risks - While there are potential headwinds such as leverage concerns and declining college demographics affecting the economy beer segment, the current valuation is seen as an attractive entry point [4] - Near-term earnings releases are expected to stabilize market expectations and highlight the resilience of TAP's cash flows [4]