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It was a marriage made in heaven…pizza and beer. But now disappointing earnings results from corporate pizza and beer producers are suggesting that this marriage may have hit the skids.
Say it ain’t so Joe…
The corporate giants behind brands like Pizza Hut, Domino’s, Molson Coors and Budweiser recently released Q3 earning reports which suggest that something profound is happening because Americans are abandoning mass-market pizza and beer brands in droves.
Tastes are changing and that’s fracturing the traditional pairing…
Millennial’s and Gen Xer’s are migrating away from beer to wine and spirits….or abandoning intoxicants altogether.
And when was the last time you had dinner at Pizza Hut?
On Wednesday, Pizza Hut’s parent Yum Brands posted quarterly sales that trailed Wall Street estimates, sending the shares plummeting according to the Spokesman Review.
Reeling from declining beer sales, Molson Coors President and CEO Gavin Hattersley laid out a sweeping corporate restructuring this week that could cost as many as 500 employees their jobs.
AB in Bev, home to Budweiser, Corona and Stella Artois, recently saw $13 billion in market value wiped out in one day after a weaker-than-expected third quarter earnings report.
“AB InBev’s attempt to broaden its appeal with new products like malt-based beverages and regional craft beer offerings haven’t widely attracted drinkers who are abandoning mainstream beer,” according to Bloomberg analyst Duncan Fox. And Molson’s latest efforts may not be enough to revive its momentum.
And pizza delivery now has a lot of competition from fast-casual dining outlets that even the introduction of drones might not be able to turn around…
Tech-savvy fast delivery pioneer, Domino’s, is also having a hard time keeping ahead of competition. And in spite of beer delivery, now allowed in some states, same-store sales growth projections have slowed from a once healthy 10% to as low as 2%.
So while the once solid marriage of mass-market beer brands and pizza producers like Domino’s and Pizza Hut might not yet be in divorce court, the legendary relationship has become starined and corporate giants are growing more concerned.
