Thanks everybody for joining us for our fireside chat with Molson Coors. With me today are Gavin Hattersley, CEO, Tracey Joubert, CFO. You know, I'll invite questions as we move along. But maybe just to get started, Gavin, you know, in October, you presented the acceleration plan, you know, to investors. That plan really, I guess, builds on the revitalization plan that was introduced in 2019. So a couple questions related to that. The first one is just looking back at revitalization, like, how would you grade that relative to what you envisioned when you put it in motion in 2019?
Thanks for having us, Brian. I'm gonna grade it an A +. I think, you know, when you look at all the ups and, and downs that we've had over the last four years. You know, we set out to grow the top and bottom line of our business on a consistent basis, and, you know, last year was the third year in a row that we grew the top line, and, and it was the second year in a row that we, that we grew the bottom line. Our guidance that we have out there says that we're gonna do the same again. So it'll be four years of revenue growth and, and three years of profit growth, on an underlying basis. Our brands are in a, are in a really healthy spot at the moment.
We've accelerated our above-premium share of our overall revenue, and we've expanded nicely into beyond beer. On top of that, we're significantly further advanced on our capability building runway than we were four years ago. So, I'm actually very pleased with where we are, and as you rightly say, the Acceleration Plan will build on that.
Right. And then I just think about the three pillars on revenue, right? Core, Premium, and Beyond. Are you where you wanna be in each one of those? And maybe just thinking about going forward, like, where do you see more of the opportunity for growth or to build upon each, you know, those three?
Yeah, sure. Look, I mean, from a core brand point of view, I think our brands are as healthy as they've ever been. And obviously, we're never gonna be satisfied. We're happy, but we're not satisfied, and we're gonna continue to build on the tremendous strength of our core portfolio. And that's not just in the United States, but it's in Canada, where Coors Light recently became the number one in the biggest beer region in Canada and is well on the way to becoming the number one in the whole country. And it's brands like Ožujsko in Croatia, which is, you know, strong, healthy, and growing. It's over 50% share. Carling is showing improvements.
So, you know, it's our core portfolio everywhere is in a great place, and we're gonna continue to build on that. Not satisfied with, obviously, our above-premium. We wanna be bigger. That was the strategy, and now we've made tremendous growth, progress there, going from 23%-27%. We wanna get even bigger. You know, in EMEA, APAC, our European business is already over half of their portfolio is in the above-premium space, and we certainly want the rest of our business to move nicely along that trajectory. Whilst we've made, you know, as I said, good progress, expanding into spaces that we've never been before, like whiskey with Blue Run Spirits Company and ZOA, in the energy space, we wanna build on that and become even more relevant in those spaces. So very happy, but not satisfied.
Okay. Then, you know, if we look at the Acceleration Plan, you know, I guess, you know, with revitalization having happened, right? Like, there's vitality at Molson Coors now. What are the things you can focus on now to really drive the business forward? So if adding, creating vitality was more about fixing and repairing, I guess, now you're at a point where, you know, you've got legs underneath it, and you can drive the business. So how does that change, I guess, the way you're thinking about the brand building or the marketing? Just, you know, how much more can you do, right, to really push the business forward versus where you were four years ago?
Well, you know, four years ago, we were making a lot of changes, and we were taking a lot of cost out of our business. You know, we're well past that phase right now, and certainly the success we had last year, the best year we've ever had from a revenue and a profit point of view, sets us up really well for this year and into the future in terms of investing the right amount of money behind our brands and building on the strength of what we've done over the last four years. You know, it's not.
You know, some folk think that, you know, the health of our portfolio was a point in time, which was April of last year, and that's just, couldn't be further from the truth, right? I mean, the health of our portfolio and brands was improving every year sequentially, from 2019 onwards, and we came into last year with strong momentum. We're gonna build on that, now. So, I think you can see that in the work that's out there. I mean, Coors Light has just recently become the number one in the grocery channel. Miller Lite is knocking on the heels of number two. And, you know, we've got some great programs coming in the summer that we're gonna build on.
You know, it's an exciting time to be at Molson Coors.
You know, just to follow up on that, three brands I was thinking about as you were responding, one is Carling, the other is Coors Light, and Miller Lite. And with Carling, right, that brand also, which maybe doesn't get as much play with our audience, but in this Revitalization Plan, the Carling brand has actually performed pretty well.
It has. I mean, it is a core brand.
Yeah.
It's been a core brand in the U.K., obviously, for a long time. Somewhat ignored, actually, for above-premium brands, but, y ou know, last year, we started to put even more focus behind it, and we're starting to see the results of that. You know, it recently became the sponsor of not only the men's FA Cup football, but also the Women's FA Cup football, and we've had tremendous positive feedback on that, given that Carling is a brand that's so associated with football. So when I say that our core brands are improving, it's globally. It's not just with Miller Lite.
Right. And that's been a, you know, focus on marketing, a focus on brand building. Like, that has yielded, right, much more.
It has.
Stability with the core line.
It has. Because, you know, the core portfolio is important to us, and it gives us the wherewithal and the strength to move into both premium and beyond beer.
Right.
So, you know, having a core that is healthy is really important to us, and we've got that now.
I guess thinking about that as well in Canada with Molson, you know, I've covered this company for years, right? Molson was a lot of ups and downs, right, over the years, but Molson also more stable, right?
It is. We had a really good year with Molson last year, and we're excited about the plans we've got from Molson this year. I mean, we just recently launched a campaign, which, you know, I don't know if you remember the Molson Canadian Fridge campaign, which was.
Yeah
.S o widely recognized. And I think the latest campaign, which we've just launched around, making, you know, woman hockey players' names more visible on their jerseys.
Amazing
A nd obscuring the.
Yeah
The Molson sign has received tremendous positive feedback broadly, not just in Canada. So I think that team is knocking it out of the park, and I think we'll see the benefits in the brand going forward.
Then turning just to Coors Light, Miller Lite in the U.S., I guess one of the things I thought was gonna be a difficult task is, how do you position both of those brands to grow at the same time without, you know, them fighting each other, right? I started my career selling in a business that sold both Canada Dry and Schweppes, and it was just, you know, Cain and Abel. You know, like, you were always fighting the people across the hall. So just how did you sort of thread that needle to get them both to grow?
Yeah, it was the challenge that we had coming into the Revitalization Plan, right? Because if you go back in history, when Miller Lite did well, Coors Light did not, and vice versa, right? When you came out of a distributor convention, you either the Miller distributors were happy or the Coors distributors were happy, but never both of them. Over the last two years, I think, maybe even stretching back three years, it's been a revelation that b ecause not all of our houses are consolidated. It's been wonderful to listen to distributors. It might be a Miller-only house or a Coors Light, a Coors-only house, saying how excited they were at the same time.
That is something that's been hard-fought and long awaited, and now we're there. We've got both of those brands actually growing very nicely. Both of them are healthy. Our distributors are happy and excited and putting a lot of time and effort behind them. The retailers are reacting to it. So, y ou know, the team have done a really nice job differentiating those.
Right
Those two brands and getting them to, I mean, they obviously both play in the premium light space, but differentiating them. And part of that is just having a consistent message. If you go back 10, 15 years and follow those two brands, Miller Lite in particular, would have a different. It was confusing, right? Because folks didn't understand what Miller Lite stood for. And you know, we've been maniacally consistent over the last four years. We bring them to life in obviously different, new and creative ways, but the underlying thread of what those brands stand for has remained consistent for four years, and you can see the consumer reacting to that.
Right. Yeah. I mean, I think it's underappreciated, just, you know, the ability to do that.
Right
Wi th both of those brands and big brands that are competitors, but, you know, under the same roof.
Right
Is not an easy task. Maybe just a couple of shorter term questions. Maybe the first one is just, you know, Gavin, I think at CAGNY, you talked. I think you made a comment about, you know, effectively, you know, the year has gotten off to a good start, in the U.S. And so maybe, Tracey, if you could talk a little bit about, how we should think about phasing in 2024, you know, some of the items that.
Yeah
T hat we should, or remind us, I guess, what we should.
Yeah
B e thinking about in terms of phasing.
Sure. Thanks, Brian. So, you know, Q1 normally is a small quarter for beer. For us, you're coming into this Q1, we wanted to make sure that we had, you know, the right inventory to be able to, you know, service as we get into the peak summer selling season. So we always really build inventory in Q1, and it's no different this year. What is incremental this year is, because of the strong demand for our brands, we've built incremental distributor inventories to make sure that we can have our beer on the shelves, you know, all over for the consumer. So, you know, a little bit of an incremental build because of the demand for our brands.
In addition, you know, we have built contingency plans around Fort Worth, and so, you know, we are coming out of this quarter with higher levels of inventory just to make sure that we do have our brands available. So, you know, Q1, our shipments certainly outpace the brand volume fairly significantly, but then we expect for the balance of the year for that brand volume to then outpace the shipments, especially as we go through, you know, summer peak season. So, that's the one thing. And then, that's the top line, you know, volume. From a bottom-line point of view, leverage has a big impact. Volume leverage has a big impact on our bottom line.
So with a big inventory build in Q1, we obviously had a big volume leverage benefit. And then as our brand volume outpaces the shipment volume for the balance of the year, you know, we wouldn't expect to see that kind of benefits. We always try and ship to consumption, so we'll see those, you know, converge as we get to the end of the year.
Right. And I guess as we think about phasing through the year on marketing investment? Because last year, you spent more as the year went on, as things, you know, got better. So is the marketing investment smoother this year versus last year, or is it gonna kind of have the same cadence as we saw last year?
Yeah.
Yeah, you go for it.
I think it depends on the brand. So, you know, when we introduce a new brand, if it's an innovation, so for example, we just launched a brand called Happy Thursday, which is a refresher type of, it's a hard refresher, so it's got alcohol in it and no bubbles. You know, you put more money behind it, to get the brand awareness. But, in terms of, you know, the big brands, Miller Lite, Coors Light, I mean, we've got really good campaigns that'll sort of be spread throughout the year.
Throughout the year.
You know, especially in summer, it's important, and as we get a fast start into the summer season, you'll see a lot of our brands, whether it be live sports. You know, we've got a lot of big tournaments coming up, March Madness, etc. . You know, you'll see our brands there. And then, you know, as we get to the back half of the year, I mean, football, et c., is really important to us as well. So I wouldn't say that you, you know, you see significant peaks and valleys, but there are periods where we would invest more, so.
Maybe just to one more shorter term question. I know, Gavin, you get a lot of questions about what happens in April.
Yes. I can't wait for April to arrive. We're only a couple of weeks away now.
My birthday is April 1st, actually.
Oh, good.
So, I guess if we think about, w e all know the comparisons are difficult, right, in the U.S.. So that's, y ou know, but it, we were talking about this a little bit earlier. Should we be thinking about, you know, like, holding or gaining share in the U.S. as being sort of the objective relative to all the, you know, what the difficult comparisons are? I think there's so much focus on, you know, if revenue- if volumes are gonna be negative because it's.
Mm-hmm
I t's got a, you know, really big comparison. Is that really the way to look at it? Or is it, "Hey, you're holding- you've gained all this share, and now you're gonna hold on to it or maybe gain a little bit more?" So just how should we be thinking about what success looks like in the U.S., given the comparisons?
Yeah, well, I mean, that question is obviously asked a lot.
Right.
I think the, we're almost a year into this now, right? It's 11 months and a few weeks, and the share gains that we've made on both a volume perspective and a dollar perspective have held. I mean, they might change a tenth of a point here or there on a week up or down, but, I mean, in fact, in the last few reads, we've actually accelerated our share gains. So, you know, we believe very strongly that the share gains are sticky. We're seeing a change in shelf space that I can't remember a time that that's ever happened at this level, right? Normally, you're battling away for one extra facing or two extra facings of something.
The amount of extra shelf space that Miller Lite and Coors Light are getting in big chains is unprecedented, and we would expect to see benefits from that. I mean, you know, the fact that we're gonna have more beer on the shelf and better placed displays is gonna continue to help the strength of Miller Lite and Coors Light. So, you know, absolutely, I believe we're gonna hold the share gains that we've made. And our job as a team is to make sure that we extend that. And, you know, Tracey referenced some of the plans that we've got behind Miller Lite and Coors Light.
And, you know, we've been, w e've already talked about the Coors Light Chill, the Choose Chill program that we launched at Super Bowl, and that we're gonna build on now as we head into March Madness and the summer. We've got some great executions and partnerships with various organizations like ESPN, which we're gonna bring to life. We're gonna localize that in 65 local markets between Canada and the United States. Then Miller Lite, we've got what I think is one of the best campaigns that Miller Lite has had, which we'll launch in the next week or so, heading into March Madness. We'd obviously put the pressure, as Tracey said, behind those programs because they're working.
Right. I mean, it appears that, and maybe I'll ask, you know, with all of the effort you put behind the Super Bowl, right? You're building awareness going into the summer selling season, but it also, in my mind, was also a check on how much of that brand equity is stuck, right? People respond, right, to the ads, but not just the ads, it was the build-up to the ads. I didn't get on the chill train. I was a little late.
I didn't either. [crosstalk]
O nto the train, and I didn't even make the ride.
I do get asked now and offers to buy merchandise, but free ticket I didn't get. But, look, so can you talk a little bit about, I know it's only been, you know, a month or so, but just, you know, now that you've been able to kind of measure how consumers have responded to all of that, just, you know, what impressions you've had?
Really, really well. I mean, the retailers have responded really well, too. I mean, we increased our displays and features in that sort of period around the Super Bowl for Coors Light, and that's obviously a very positive thing for us. And as I've just, I think I mentioned, I might not have. Coors Light recently became the number one brand in grocery. That's a big deal, Brian. And obviously, that's a testament to the work that team and our sales team and our distributors are doing to bring that brand to life and, you know, positions us really well as we head into summer.
All right. Wanna just give anybody in the room a chance to ask questions, if anybody has one? No? Okay. So maybe just one more shorter term question. Tracey, we talked a little bit earlier about, I think you've got a bond maturing this year.
Mm-hmm.
So just, what will you refinance? Just how will you approach the maturity?
Yeah, so we have got an EUR 800 million bond coming June, July. We haven't made a decision on what we're gonna do. We're assessing the markets, the financial markets. You know, we're assessing the area, the countries that we operate in. You know, this is a euro bond.
Right
So you know, we wanna make sure that we've got a good balance of our debt. So we're busy assessing that. I mean, I think the good thing is, with our really strong free cash flow generation, we've got options. But we haven't made a decision yet.
Right. Right, right. I guess rates of, I mean, it's if we were having this conversation six months ago, you know, it seemed like who knew.
Right
In terms of rates.
Mm-hmm.
It seems like it's a little bit more visibility as you get into that.
Yeah, yeah.
Yeah.
Yeah.
Okay, cool. So maybe, you know, if we think about the changes, Gavin, that you've made since you became CEO, we talked a little bit about this last night, right? They're pretty profound, right? I mean, two families that have a long history in this this business that, you know, had to accept some of the pretty major changes made. And that's including, you know, the lift out of Denver and, you know, smaller headquarters in Canada. So could you just maybe talk about, maybe first, just your relationship with the board and how that might be different than other people who sat in your seat now?
Yeah, that's a great question. You know, I think four years ago, as sort of making my pitch to run Molson Coors, and what ideas I would bring, the great thing was that the board was understanding that we needed to change. We needed to do things differently. You know, we hadn't, as we've talked about a lot, grown the top and bottom line at the same time of the organization in a very long time. You know, we might grow one, but not the other, and never consistently. And so there was a strong appetite for doing things differently. So, you know, the plan landed on fertile ground.
You know, the leadership team has executed the plan as we laid it out with not a lot of change. You know, frankly, Brian, I think we kind of got the strategy right. You know, we knew what we wanted to do, and we executed it. And the support from the board's been tremendous. I mean, you're right, we made some tough decisions, and the board has been supportive of that all the way through. And obviously now, four years later, having done what we said we wanted to do, which was top and bottom line at the same time, having done that for two years in a row, and guidance that's gonna make that three years in a row.
Yeah, very, very supportive. Yeah, it's actually great for the leadership team as we talk to the board and we expose our plans to them, how receptive and supportive they actually are. It's very visible.
Yeah, it's a, it's a profound change, I think.
It is.
And I think maybe to follow up on that, as we think about capital allocation, you know, both the Molson and the Coors sides of this, right, went through a phase as the industry was consolidating, it was making acquisitions, right? And Carling was an opportunistic acquisition for Coors years ago, right? Molson wandered into Brazil at one point, right? You know, but what was lacking, I guess, over time, was a real commitment to returning cash to shareholders in a more meaningful way other than just, you know, paying dividends. So just, can you talk a little bit now about how you and the board thinks about capital allocation?
I know you talked about share repurchases and dividends you had the repurchase authorization, but just how that balances maybe with other more opportunistic investments.
Yeah, and Tracey, you can add to this, right? But Brian, you know, one of the core elements of our strategy was getting our balance sheet in great shape, and Tracey and her team have just done an amazing job with that. And part of that has been the String of Pearls strategy. And, you know, I think that's a recognition that it is hard to do big acquisitions and make them really successful. And it's not just us, right? I mean, it's everybody has a hard time with this. I mean, you just look at the, you know, the overall alcohol space, whether it's a beer company or a spirits company, it's hard to do a big acquisition and do it really well.
And we hadn't been super successful at that. And I think where we are successful, and we have demonstrated capabilities, is in the smaller String of Pearls approach, which obviously now that our balance sheet's in great place, you know, we might have been talking about, you know, $20 million or less acquisitions, and we can talk about slightly bigger ones, which we demonstrated with our move into, you know, a meaningful share of ZOA and our acquisition of Blue Run. Those are slightly bigger, but they still fall into the String of Pearls approach.
The board is very supportive of that approach. You know, we'll continue down that path.
Right.
And I would just add that the buckets of our capital allocation, you know, haven't changed. We will continue to run all of our capital allocation decisions. We've got models that we run them through, and, you know, we take it to the board. And you'll see some of those decisions that we made in the past, like where we've made significant investments in our breweries to drive capabilities that we didn't have before, like flavors, variety packing, you know, et c.. That's all helping to deliver on our, you know, the COGS and cost savings and things like that. So, and that's a really great return. So we'll continue to invest in our breweries.
You know, we'll continue to invest in our brands because, you know, to Gavin's point, the aim of the revitalization and now the acceleration is to grow both top and bottom line. So investing for the long term, you know, for that sustainable growth is gonna be really important as well.
Maybe just to turn to, you know, at CAGNY, Gavin, you part of the presentation was on the category itself, right? The beer category. So maybe can you give us, you know, a quick take, your view of the category in your key markets, so U.S., Canada, and the U.K.? You know, because I think the perception in the market is it's not that healthy, at least in the investment world. So just, you know, your perspective on beer category as it stands today.
Yeah, I mean, our view, let's start with our biggest market, the U.S., is that the overall category will, over a long-term basis, be in that sort of flat to, you know, down around 1%-ish, over time, and that is a strongly held view of ours. I think, as you look at last year and what transpired last year around the beginning of the year, and, you know, some really tough weather in one of the biggest beer markets in the U.S., and obviously, we saw a nice improvement coming out of last year in Q4.
You know, this year a little tougher from a weather point of view in the first part of the year, showing strength and improvement in February. I think it's safe to say, though, that how the beer category does this year will be determined by what happens in spring and summer, because you know, January's the lowest beer-selling month. February's not a lot better, so you know, how we do as a category will be determined by that. And I think, you know, consumers have demonstrated that they like you know, the beer space. That they're generally loyal to it. It's moderation.
You can see that in the fact that beer is growing dollar share of the overall alcohol segment, you know, at the expense of full bottled spirits over time. That certainly has proven to be beneficial for us. So U.S., feeling good about it. Canada, consumers, it's been a little tougher up there from a overall consumer point of view, from a category point of view. From our perspective, we're doing amazingly well, you know, in a tough market. I mean, we're growing substantial share in Canada each and every month. It's been tremendous.
But the overall consumer in Canada has, I think, from an economic environment point of view, been more, been more challenged than the U.S.. If you look across the water to our two markets there, we've seen improvement in Central and Eastern Europe. They were our most challenged market from a disposable income point of view over the last few years, for sure, and we're seeing some improvement in that now as energy costs moderate and consumers' disposable income becomes greater, and so we're seeing the benefit of that. And in the U.K., the on-premise remained remarkably resilient, and that's where, that's our powerhouse. I mean, 70% of our revenue comes from the on-premise. The off-premise has been a little soft recently.
That's probably driven by the excise tax increase, which was meaningful, and has had an impact on the off-premise. So yeah, a little bit of a mixed bag, but feeling good overall.
Right. And then maybe just to look, drill into the U.S. a little bit more. One is just one of the observations, I guess, in the U.S. over the last year or two has been the growth in, like, single can, you know, like, two, you know, 24 oz can or, you know, larger can sizes, so it's kind of a single transaction versus buying, I don't know, maybe a six-pack or a 12-pack, and it got me thinking about, you know, volumes versus transactions. And, you know, so if we were to look at your business in the U.S., what we're all focused on is sheer number of liquid consumed, right?
Are the number of transactions actually growing or at a, you know, a better pace than just the volume itself because consumers are maybe purchasing less volume per transaction?
Well, certainly we've seen an improvement in the C-store space, right?
Yeah.
I mean, the C-stores went through a little bit of a tough period during the pandemic, and certainly that has improved as we've come out of the pandemic. From a trading point of view, you know, we haven't seen a lot of trade down, you know, from a brand point of view.
Right
From above premium to premium lights or into the economy space. We've not seen that. What we have seen is consumers making different decisions and certainly going into smaller pack sizes, like singles, as you said, and like six-packs, we've seen. But we've also seen it on the opposite end of the spectrum, moving into larger pack sizes, 36 packs and so on. So, you know, that's consumers seeking out value as they can find it. We've certainly seen that.
Right. And then we were talking a little bit last night about, you know, in the U.S., beer versus spirits and, you know, share of stomach, I guess. And so you, w e're observing now the spirits industry slowing, right? Pretty meaningfully, actually. You know, it really started in the fall and, you know, proceeded through the holidays. So, you know, your perspective, I know it's been a long sort of 20-some-odd years of spirits kind of gaining shares just from, you know, relative to beer share of ethanol. So just, you know, is it, are we at a point maybe where that, that's beginning to rebalance itself a little bit?
Yeah, certainly hope so, Brian. I mean, last year was, I mean, we grew dollar share of the overall alcohol space, beer did, and I don't think we've done that too often in the past.
Right
And certainly, full-bodied spirits, as I said earlier on, you know, hitting a wall is probably too strong a word, but it is certainly declining meaningfully. And you know, the ready-to-drink spirits category has picked up. Consumers have, though, moved into flavored malt beverages in a meaningful way, and Simply Spiked obviously plays very nicely in that space. And you know, consumers are looking for different as well. That's why we're particularly excited about Happy Thursday. Tracey mentioned it earlier on. And so it's a consumer insight which we picked up around you know, younger legal drinking age consumers wanting bubble-free liquids.
Right.
And actually creating their own bubble-free liquids. So we're meeting a need, and we're first there, and we're excited about it. I mean, it's just a couple of weeks, right, that we're in the marketplace. But certainly the receptivity to Happy Thursday has been strong. So, take that, also taking away from, we believe, spirits as well.
Right. You know, it's more hypothesis than anything else, but even the growth in ready-to-drink spirits, right? Kind of shows that portability, you know, maybe there's a little bit of a not wanting to invest in a whole bottle. You know, like, spirits is an investment. It's a commitment, right? And so maybe there's a little bit also of just that bringing that, you know, that, you know, whether it's a can or a bottle, single serve, kind of back to, you know, consumer, brings people back to beer as well.
Right.
Right.
Well, I mean, certainly I think, obviously, the spirits guys are closer to this than we are, but certainly there was a stocking up of spirits, and spirits lasts a long time, right?
Yeah.
If you've got a couple of bottles, you don't need to replace it.
Yeah, yeah.
Whereas beer is obviously an alcohol type, which you move through pretty quickly because it obviously doesn't have an unlimited shelf life.
Right. Gavin, maybe if we can talk a little bit about the two international segments, and I think, in 2019, one of the things you said was that, you know, the focus was to get the U.S. fixed, right? If you don't get the U.S. fixed, the rest of it, you know, wasn't gonna, you know, you need to do that first. And so, you know, there's a little bit of a scaling or refocusing, I guess, the international segments, and maybe exiting some markets or moving into, like, export model type of thing. So just where does that stand today, and, you know, is there appetite to invest more in international? Just that balance between the domestic and international segment.
Yeah, well, certainly in 2019, and making sure that we had a strong, healthy North American business was important, right?
Right.
Because we made 85% of our profit comes from North America, so making sure that was robust and strong was important, and that's where we directed our investment first and foremost. But at the same time, the European business has been right-sizing their investments and right-sizing their business. They did the same, we did the same in Europe as we did in the United States and Canada, right? Removed layers of leadership to get, you know, decision-making much quicker, remove bureaucracy, take out duplicate costs. They were working just as hard at that in Europe as the folk here in America were as well.
We also, as you rightly say, we got rid of businesses and breweries that we just saw no path to a profitability in very difficult markets for us. We're following the asset light approach. Now, we think our brands have got tremendous potential around the world. You know, Coors and the Miller family of brands are lead brands in our portfolios from an above-premium point of view. And we think there's great opportunity for them to expand, and we're gonna do it in an asset light way, though. We think that works really well for us. Making sure we choose the right partners in the countries in which we go to is we put a lot of time and effort.
Those are the things we've learned from some of the mistakes we made in the years past, and you know, it's coming to life very nicely. We've also got the, y ou know, we talked about this last night, right? I mean, we've got the most successful launch I think we've had in EMEA, APAC, and certainly one of the most successful in our total business with Madrí Excepcional.
In three years, that brand is well north of one million hectoliters, and we're expanding it. So we're expanding it into one country in Central and Eastern Europe. We're expanding it into Canada. We're gonna be really thoughtful about how we expand it. But it's an above-premium brand that's had unprecedented success, and you know, I'm excited about a lot of things in our business, and that's one of them.
Right. You know, last fall, Molson Coors announced a number of, like, optimization initiatives, I guess, in the commercial structure in the Americas. So, you know, what's changed? I guess that's the first thing. Just what's changed there?
Well, we put the commercial group in place in about this time last year, I think. And the objective there was the power of bringing, you know, America, United States, and Canada, and Latin America into one group and transfer ideas much quicker and, again, remove barriers to being effective as one group.
Right.
And then we built on that, as you say, in the fall. We formed the Commercial Accelerator, which includes, you know, functions like, digital and media, buying and, you know, consumer insights and so on, and providing a service much more broadly than those groups perhaps were before. And I think you're starting to see the benefit of those decisions in Canada, in Latin America, as well as our brands gain strength and the work that we're doing in the U.S. with Coors Light, for example, Miller Lite, you can see that in Canada and Latin America.
We've launched Madrí, as I said, in Canada, and if that does as well as we expect it to do, we certainly can expand that to other markets, and so it certainly made us more nimble. No question about that.
Right. And it's.
We've also, sorry, just one other thing from in four. We actually also had a really good understanding of what was working and maybe what wasn't working, and where we needed to refocus some of our attention, and we did that at the same time as well to, you know, we put more resource with our distributors than perhaps we had before.
Is it correct to look at this not as a way to spend less or, you know, there's efficiency involved with but m y perception of it is, you know, you've, you've actually inc rebased your marketing budget and your, your commercial spend higher, and now you've got, you know, a more efficient way to spend that money, so it's, it's not meant to save as much?
Yeah, look, I mean, it's, there certainly is incremental investment, but it's not material.
Right.
We've also done a lot of work over the last few years around getting more efficient with our marketing spend, whether it be, you know, shifting more into digital. More than 50% of our spend now is in the digital space. That's also more agile, more flexible spend. And then, you know, we've looked at a lot of our investments from, you know, the non-working dollars to shifting more to working dollars. So we've been doing that all along. So, you know, this incremental investment that we've made, and it is not material. We've been able to do it because of the efficiencies that we've driven, you know, in the marketing over the last few years.
Okay.
That's an important point, right? That Tracey made. It wasn't about cutting costs. In fact, our costs went up.
Right.
It was about redirecting the resources to where they can be most effective.
Right. Right. Yeah, that was my thinking. You know, you've got, you've got more to spend, and now you wanna make sure you spend it as effectively as you can.
In the right way.
Right. All right, well, we are just about out of time. So, Tracey, Gavin, I wanna thank you both for spending some time with us today and spending the day with investors here. And thank everybody else here for joining.
Thanks, Brian.
Thank you.
Thanks.
Thank you.