​ 1

Beyond Beer: Brewing Innovation at Molson Coors- A Strategic Analysis

Sarang D. Singh

School of Business, Capilano University

BADM 204 01- Strategic Management

Mr Houman Sanandaji- Sasha

February 09, 2024

​ 2

Executive Summary

Molson Coors, one of the five largest brewing companies in the world, faced a

pivotal strategic dilemma in 2019- whether to accelerate its expansion into the cannabis

beverage market or not. The recent legalization of cannabis in Canada presented new

opportunities for Molson to diversify beyond traditional beer offerings and save themselves

from a revenue decline due to a shift in consumer preferences for beer (Kenny, 2021-present).

As such, CEO Mark Hunter approved a CAD 65 million investment for a dedicated Cannabis

beverage production facility, significantly accelerating the company’s involvement in this

emerging industry despite major regulatory, financial and brand identity risks around it.

This report aims to critique Molson Coors' strategic decision to invest in

cannabis-infused beverages through its joint venture with Truss Beverages. While this

decision was positioned as a forward-thinking move into an emerging market, the strategy

carried significant risks such as - regulatory uncertainty, brand identity risk, and the

unpredictability of consumer demand which ultimately outweighed the positives of the

venture (Kenny, 2021- present). Instead, it argues for alternative strategic directions,

including expanding into non-alcoholic beverages, strengthening its craft beer portfolio, and

adopting sustainability initiatives to enhance the company's long-term competitiveness. Using

Porter’s Five Forces, PESTEL, and SWOT frameworks, this report will analyze the external

and internal factors influencing Molson Coors’ strategy. The findings suggest that a more

calculated and gradual market entry approach—focusing on small-scale product launches,

CBD-infused health beverages, and broader diversification into functional drinks—would

have been a safer and more sustainable strategy.

Keywords: Cannabis-infused beverage market, CEO Mark Hunter, PESTEL Analysis, Molson Coors, Porter’s

Five Forces Framework, risk-mitigation strategy, Strategic decisions and management, SWOT Analysis.
​ 3

Introduction: A Brewing Giant at a Strategic Crossroads

Molson Coors has long been a dominant force in the global beer industry, owning iconic

brands such as Coors Light, Molson Canadian, and Blue Moon to name a few (Kenny,

2021-present). However, the global beer market has undergone a serious change in changing

consumer preferences for alcoholic beer over the past decade (Innova Market Insights, 2025).

According to Brian Kenny from Harvard Business School who has been closely monitoring

this case-

Beer industry sales have begun to decline as generational tastes and consumption

patterns change. For my generation, the baby boomers and Gen X folk, 50 percent of

our alcohol consumption is in beer. For millennials only about 25 percent is in beer,

with the rest being in wine and hard liquor. And for members of what we call Gen Z,

those who are old enough to drink, the consumption of alcohol is only 12.5 percent in

beer. So their business is drying up (Kenny, 2021-present).

There is no denying the fact that Millenials and Gen-Z consumers are consuming less

beer. According to Statista 2023, health consciousness has been on the rise for Millennials

and Gen-Z audiences. They would much rather opt instead for craft beers, hard seltzers,

wellness-oriented beverages, and non-alcoholic drinks (that also includes cannabis). As a

result, traditional beer brands like Molson Coors have sought new growth avenues beyond

their core products to diversify their earnings and retain their market value.

In 2018, Canada became the first G7 country to legalize the recreational use of cannabis

owing to its widespread use and medicinal properties (Osler, Hoskin & Harcourt LLP, 2024).

This decision opened an entirely new industry for cannabis-induced products in Canada and

recognizing this opportunity, Molson Coors entered a joint venture with HEXO Corp.

(forming Truss Beverages), to explore cannabis-infused drinks. Initially, the company

​ 4

planned to follow a conservative approach and enter the market cautiously, testing consumer

preferences with limited product releases. However, by 2019, slacking profits and

competitive pressure lead to a dramatic shift in their company strategy. In March 2019, the

Truss team requested a CAD 65 million investment to build a dedicated cannabis beverage

production facility, citing first-mover advantage and supply chain limitations. Despite the

high-risk nature of the market, CEO Mark Hunter approved the investment, committing

Molson Coors to a large-scale expansion with significant financial risk. The management at

Molson Coors was so adamant and excited about this venture that they even changed Molson

Coors's tagline from a “Brewing company” to a “Beverage company”.

In the upcoming sections, this report critically examines whether this decision was

strategically sound and explores alternative approaches that could have mitigated this risk

while ensuring long-term success.

Critical Analysis of Mark Hunter’s Decision

Regulatory Uncertainties and Legal Risks

One of the most critical concerns in Hunter’s decision was the regulatory landscape of

cannabis beverages, which was far from stable in 2019. While Canada had legalized

recreational cannabis, edible and infused cannabis products were still subject to heavy

regulations. Health Canada’s strict marketing, packaging, and manufacturing laws posed

significant operational challenges (Osler, Hoskin & Harcourt LLP, 2024).

Unlike traditional beverages, cannabis-infused drinks faced severe distribution and

retail restrictions. In Canada, cannabis beverages could only be sold in government-licensed

dispensaries, significantly limiting Molson's accessibility to a free market. On top of that,

Alcohol and cannabis could not be sold together in many provinces, forcing Molson Coors to
​ 5

develop an entirely separate sales and distribution network from what they had in place

before setting up the venture. This inability to leverage existing alcohol distribution channels

increased operational costs and logistical complexity by a huge margin (Man, 2010).

Moreover, U.S. federal laws prohibited Molson Coors from expanding cannabis beverages

beyond Canada, meaning the investment lacked scalability shortly for their home country, the

US or anywhere in the world. The company’s headquarters in the United States created legal

complications as well, as engaging in cannabis production could jeopardize banking

relationships and investor confidence in the company (Osler, Hoskin & Harcourt LLP, 2024).

Given these significant legal uncertainties, committing CAD 65 million to large-scale

production was an excessive risk. A more prudent strategy would have been to wait for

regulatory stability before scaling investment.

Brand Identity Risks

Historically, Molson Coors’ brand identity was deeply rooted in brewing excellence

rather than beverage excellence. The company has prided itself on traditional beer for over a

century, and this legacy created internal resistance to cannabis-related ventures (conflict of

vision here). By investing aggressively in cannabis beverages, the company risked diluting

that legacy. Unlike companies with wellness-focused branding such as Anheuser-Busch

which diversified into non-alcoholic drinks first, Molson Coors lacked a transitional branding

strategy. Molson Coors was primarily known for its aggressive beer and sports culture. In

addition to this, they also had long-standing partnerships with sports leagues, social events,

and mainstream retailers. Aligning with cannabis could have jeopardized these partnerships,

as many sponsors and retailers were reluctant to associate with cannabis products. This

misalignment weakened the company’s ability to integrate cannabis into its portfolio
​ 6

successfully. A gradual brand evolution strategy, similar to how Anheuser-Busch expanded

into non-alcoholic beverages, would have been less disruptive.

Market Viability and Consumer Demand Uncertainty

Another point to note is that the cannabis beverage market in 2019 was untested, with

no established demand patterns or reliable market data. Unlike beer, cannabis beverages had

no historical consumer base, making demand forecasting nearly impossible. While some

analysts projected growth in the cannabis beverage market, consumer preferences remained

extremely unclear. Early reports indicated that cannabis beverages struggled compared to

edibles and vapes, as flavour, onset time, and pricing were major concerns (Cannabis Pricing

Report, 2021).

Given this lack of market validation, investing heavily in large-scale production

without clear consumer demand was highly speculative. A smaller-scale test-market

approach, rather than full-scale production, would have allowed Molson Coors to refine

products based on real consumer feedback before making irreversible financial commitments.

Strategic Recommendations for Molson Sustainable Growth

To ensure sustainable growth and solidify its position in the evolving beverage

industry, Molson Coors should implement a comprehensive strategy that not only leverages

its existing resources and capabilities but also introduces innovative approaches to meet

emerging market demands. The following recommendations provide a detailed roadmap:

1. Phased Market Entry and Consumer Demand Assessment:

Entering the cannabis-infused beverage market presented uncertainties due to

evolving regulations and consumer perceptions. A cautious, data-driven approach minimizes

​ 7

risks and aligns products with market demand, such as in the case of craft beers and

non-alcoholic beverages. Steps that can be taken to implement this can include:

A.​ Targeted Pilot Launches: If Molsons still wants to continue with its cannabis drinks, it

should introduce its cannabis-infused beverages in only select Canadian provinces

where regulations are favourable and consumer interest is evident. This controlled

approach allows for monitoring without overextending resources like what was done

before (Bhensook et al., 2025).

B.​ Consumer Feedback Mechanisms: To tap into tech-savvy consumers like the

Millenials and GenZ, establish channels such as focus groups, surveys, and social

media engagement to gather real-time consumer insights about what type of

beverages are on demand. Utilize this data to refine product offerings, ensuring they

meet consumer expectations (Sulek et al., 1995).

2. Expansion into Functional and Health-Focused Beverages:

The rising consumer preference for health and wellness products offers an

opportunity to diversify Molson Coors' portfolio beyond traditional alcoholic beverages. Just

like its competitors, Molsons should be at par with them by offering a plethora of drink

options:

A.​ Develop CBD-Infused Wellness Drinks: Collaborate with health experts to formulate

beverages that combine CBD with natural ingredients known for health benefits, such

as chamomile for relaxation or green tea for antioxidants. This will attract a whole

new range of tested audiences that don’t want to consume alcohol but want to enjoy

time with their friends.

B.​ Launch Adaptogenic Beverages: Create drinks infused with adaptogens like

ashwagandha or ginseng, which are believed to help the body manage stress (Cathers,
​ 8

2023). Market these products to health-conscious consumers seeking natural

stress-relief solutions to increase revenue.

C.​ Strategic Partnerships: Partner with established health and wellness brands to

co-develop and co-brand these beverages, leveraging their credibility and existing

consumer base to accelerate market penetration. Develop exclusive cocktail mixers in

collaboration with Fever-Tree, targeting the growing home-mixology trend. Jointly

market these products through both companies' channels.

3. Revitalization and Premiumization of Core Beer Brands

Enhancing the appeal of core beer brands can attract new consumers and retain existing

ones, countering declining beer consumption trends:

A.​ Limited-Edition Releases: Introduce seasonal or limited-edition brews that experiment

with unique flavours or brewing techniques. This creates a sense of exclusivity and

urgency among consumers (Harrison, 2015).

B.​ Heritage Storytelling: Craft compelling narratives around the history and

craftsmanship of their age-old brewing. Utilize multimedia campaigns to share these

stories, deepening consumer connection and justifying premium. Collaborate with

premium retailers and upscale venues to position these products in locations that align

with their premium image, ensuring they reach the target demographic effectively.

C.​ Sustainable Packaging: Transition to biodegradable or recyclable packaging materials.

Launch consumer awareness campaigns highlighting these initiatives to build brand

loyalty among environmentally conscious consumers.

By implementing these detailed strategies, Molson Coors can navigate the complexities

of the modern beverage industry, capitalize on emerging opportunities, and ensure long-term

sustainable growth.
​ 9

Strategic Changes Supporting the Decision (Based on Porter’s Five Forces)

To support the strategic recommendations proposed for Molson Coors—focusing on

wellness drinks, craft beers, and flavoured beers—several strategic changes must be

implemented to strengthen the company’s competitive position. Using Porter’s Five Forces as

a framework, the following analysis provides a detailed roadmap for how Molson Coors can

adapt its strategy to navigate competitive pressures while capitalizing on emerging

opportunities.

1. Threat of New Entrants – Moderate to High

Challenge:

The beverage industry is highly competitive, and new craft breweries and

health-focused beverage startups continue to emerge. Additionally, direct-to-consumer (DTC)

brands are disrupting the industry by bypassing traditional retail channels and engaging

directly with consumers online. While Molson Coors has established brand recognition and

distribution networks, the cost of entry for niche craft and wellness beverage brands is

relatively low, making competition intense.

Strategic Changes:

To reduce the risk posed by new entrants, Molson Coors must focus on

differentiation, supply chain efficiency, and exclusive partnerships:

●​ Brand-Driven Differentiation: Develop a premium identity for new craft and

flavoured beers by leveraging storytelling, limited-edition releases, and heritage

marketing. This approach mirrors the success of brands like Guinness and Heineken,

which have used strong brand narratives to maintain dominance.

​ 10

●​ Exclusive Distribution Agreements: Secure preferred retail and bar placements for

new products, ensuring visibility and accessibility while limiting opportunities for

competitors to gain shelf space. With Molson's market dominance, it can provide

liquor stores and grocery stores with discounts for putting only their beverages.

Why This Matters:

By enhancing brand strength and securing exclusive retail channels, Molson Coors can create

barriers to entry for new competitors, forcing them to invest heavily in marketing and

distribution to compete.

2. Bargaining Power of Suppliers – Moderate

Challenge:

Suppliers of key ingredients (hops, malts, and natural flavourings for wellness

drinks) hold moderate power. With the rise of sustainability concerns, securing ethically

sourced raw materials is both a business necessity and a brand requirement (Weissman,

2024). Furthermore, as inflation and supply chain disruptions increase costs, dependence on

third-party ingredient suppliers can impact profitability and pricing strategies.

Strategic Changes:

To gain better control over costs and supplier relationships, Molson Coors should:

●​ Vertical Integration: Invest in direct sourcing agreements with hop farms and fruit

suppliers, reducing dependency on intermediaries.

●​ Sustainable Ingredient Sourcing: Partner with local, organic suppliers to ensure that

wellness beverages meet clean-label and sustainability standards enhancing consumer

​ 11

trust. Develop alternative ingredients and in-house formulation, reducing reliance on

external suppliers and ensuring proprietary blends for functional beverages.

Why This Matters:

By reducing supplier dependency and securing direct access to raw materials, Molson

Coors can protect margins, enhance sustainability efforts, and maintain consistent quality.

3. Bargaining Power of Buyers – High

Challenge:

Consumers today have increased access to information, greater brand choices, and

shifting preferences toward craft, wellness, and non-alcoholic beverages (Thompson, 2024).

Additionally, large retailers and distributors (e.g., Walmart, Costco, and Total Wine) have

strong bargaining power, demanding lower prices and exclusive deals.

Strategic Changes:

Molson Coors must shift towards consumer-driven innovation and tailored

engagement strategies:

●​ Health-Focused Innovation Pipeline: Develop a dedicated innovation team focused

exclusively on consumer insights for wellness and functional beverages, ensuring new

launches align with emerging health trends.

●​ Loyalty & Personalized Offerings: Introduce customized beer packs where consumers

can mix and match flavours online before ordering, a strategy successfully used by

craft brewers and hard seltzer brands. Offer store-exclusive flavours and

limited-edition wellness drinks to maintain a strong presence in high-traffic retail

stores.
​ 12

Why This Matters:

By offering personalized experiences, unique retail partnerships, and health-focused

innovations, Molson Coors can increase consumer loyalty while balancing retailer power.

4. Threat of Substitutes – High

Challenge:

Consumers are moving away from traditional beer and exploring health-conscious

alternatives, including Hard seltzers, Kombucha-based drinks, Functional beverages infused

with vitamins and adaptogens, and Low-alcohol and alcohol-free beers (Cathers, 2023). This

shift threatens Molson Coors' core beer sales while also challenging its ability to compete in

the wellness market.

Strategic Changes:

To counteract the threat of substitutes, Molson Coors must expand and refine its

product offerings:

●​ Increased Investment in Alcohol-Free Craft Beers & Flavored Brews: Develop a

broader range of non-alcoholic and reduced-alcohol beers that mimic the taste of craft

brews while catering to the growing moderation movement.

Why This Matters:

By offering compelling, high-quality alternatives to substitute products, Molson Coors

can capture health-conscious consumers and craft beer enthusiasts while retaining market

share.

5. Industry Rivalry – Intense

​ 13

Challenge:

Molson Coors faces strong competition from major beverage conglomerates, including

Anheuser-Busch InBev (Budweiser, Michelob Ultra), Constellation Brands (Modelo,

Corona), Heineken (Heineken 0.0, Lagunitas), and Smaller craft breweries rapidly gaining

local market share. Competitors are aggressively investing in premium, non-alcoholic, and

health-conscious beverages, making the market more saturated and fragmented.

Strategic Changes:

Molson Coors must focus on premiumization, brand storytelling, and global expansion

to remain competitive:

●​ Premiumization of Beer Offerings: Introduce higher-end craft beers with specialty

flavours to appeal to consumers willing to pay more for quality.

●​ Localized and globalized Marketing for Craft Offerings: Develop regionally-inspired

craft beer flavours, taking inspiration from local ingredients and traditions to create

deeper community connections. Utilize existing distribution channels to introduce

wellness drinks and flavoured beers to international markets, capitalizing on European

and Asian demand for premium beverages.

Why This Matters:

By expanding its premium offerings, creating regional flavours, and pursuing global

opportunities, Molson Coors can differentiate itself from both major competitors and

emerging craft brands.

The beverage industry is experiencing a major transformation, driven by changing

consumer habits, increased competition, and demand for functional wellness beverages.
​ 14

Using Porter’s Five Forces, it is clear that Molson Coors must adopt strategic changes to

solidify its market position and create sustainable long-term growth. By executing these

strategic shifts, Molson Coors can redefine itself as an industry leader in the evolving

beverage space, ensuring its relevance beyond traditional beer and securing a profitable

future in the growing health-conscious market.

External Environmental Analysis Based on the Proposal: PESTEL and SWOT Analysis

SWOT ANALYSIS:

Fig 1: SWOT ANALYSIS

​ 15

PESTEL ANALYSIS:

Fig 2: PESTEL ANALYSIS

Conclusion

The SWOT and PESTEL analysis demonstrate that Molson Coors has strong

opportunities to expand its non-alcoholic and craft beer portfolio. However, to succeed,

the company must:

1.​ Leverage its brand strength and distribution network to establish a dominant

presence in the growing wellness beverage segment.

​ 16

2.​ Invest in advanced brewing technology to create better-tasting, low-alcohol

alternatives that appeal to a broad consumer base.

3.​ Adopt sustainable sourcing and packaging solutions to meet consumer and

regulatory expectations.

4.​ Develop targeted marketing strategies that align with the health-conscious lifestyle

movement.

By implementing these strategies, Molson Coors can remain competitive in the evolving

beverage industry, ensuring long-term growth and profitability beyond traditional beer.
​ 17

References

Bhensook, N., Rattanakul, T., Synsatayakul, W., & Tohwisessuk, P. (2025). Public Use and

Distribution of Retail CBDC: An Evidence from Thailand’s Retail CBDC Pilot

Program. Jahrbücher Für Nationalökonomie Und Statistik.

https://doi.org/10.1515/jbnst-2024-0047

Cannabis pricing report. (2021). [Report Deloitte].

https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/consumer-industrial-p

roducts/ca-en-cannabis-pricing-report-aoda-v4.pdf

Cathers, M. (2023). Can ashwagandha soothe stress? Pharmacy Today, 29(12), 16.

Harrison, T. (2015). Creating a Sense of Urgency for the Customer - or Not. Image Source,

17(7), 10.

Innova Market Insights. (2025, February 6). Global beer trends. Beer market trends indicate

that the industry. https://www.innovamarketinsights.com/trends/global-beer-trends/

Kenny, M. (2021). Should Global Beer Company Molson Coor Enter the Cannabis

Beverages Business?

https://hbr.org/podcast/2021/10/should-global-beer-company-molson-coors-enter-the-

cannabis-beverages-business

Man, R. (2010, May 24). Molson Coors Canada makes complexity look simple. Consumer

Goods Technology.

Osler, Hoskin & Harcourt LLP. (2024, May 10). Canada first G7 country to legalize retail

cannabis - Osler, Hoskin & Harcourt LLP.

​ 18

https://www.osler.com/en/insights/updates/canada-first-g7-country-to-legalize-retail-c

annabis/

Statista. (2023, March 21). Statista. Total beer sales in Canada 2009-2023.

https://www.statista.com/statistics/331951/beer-sales-in-canada/

Sulek, J. M., Lind, M. R., & Marucheck, A. S. (1995). The impact of a customer service

intervention and facility design on firm performance. Management Science, 41(11),

1763–1773. https://doi.org/10.1287/mnsc.41.11.1763

Thompson, A. A. (2004). Crafting and Executing Strategy : The Quest for Competitive

Advantage - Concepts and cases.

Weissman, R. (2024). The role of ethical leadership in the supply chain. Supply Chain Dive,

N.PAG.