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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day and welcome to the Molson Coors Beverage Company Full Year and Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants can find related slides on the Investor Relations page of the Molson Coors website. Our speakers today are Gavin Hattersley, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer. Please note this event is being recorded.
With that, I'll hand it over to Greg Tierney, Vice President of FP&A and Investor Relations. Please go ahead.
All right. Thank you, Andrea, and hello, everybody. So following prepared remarks from Gavin and Tracey, we will take your questions. Please limit yourself to one question. If you have more than one question, please ask your most pressing question first, and then reenter the queue for a follow-up. To the extent that you have technical questions on the quarter, we ask that you pick them up with me in the days and weeks to follow.
Today's discussion includes forward-looking statements within the meaning of applicable securities laws, important factors that could cause actual results to differ materially from expectations and projections contained in such statements are disclosed in the company's filings with the SEC. The company does not undertake to update forward-looking statements, whether as a result of new information, future events, or otherwise.
GAAP reconciliations for any non-U.S. GAAP measures are included in our news release, or otherwise available on the company's website at www.molsoncoors.com. Also, unless otherwise indicated, all financial results the company discusses are versus the comparable prior year period and in U.S. dollars.
And with that, over to you Gavin.
Thanks, Greg. Look, 2019 was a challenging year for Molson Coors Beverage Company. However, despite significant headwinds and continued volume declines, we grew net sales revenue per hectoliter and improved our mix. We delivered strong free cash flow and cost savings, reduced our debt and started making progress towards premiumizing and modernizing our portfolio.
We know there's still a lot of work to do. And that's why last quarter, we announced the plan to get Molson Coors back to consistent top line growth. Plan is designed to streamline the company, allow us to move faster and to free up resources to invest in our brands and capabilities. And as promised in October, we've wasted no time implementing the plan.
And to remind you, there are five components of the revitalization plan: investing in our iconic brands, aggressively growing our above-premium business in beer and in flavored beverages, growing beyond beer, strengthening our capabilities and streamlining our company. So let me update you on some of the progress that we're making.
We believe in the future of our core brands, because they have the power to recruit new legal-age drinkers, which is why investing in our core is a key part of our revitalization plan. In the fourth quarter of 2019 in the United States, we released new creative pieces in the Coors Light Made to Chill campaign and the Miller Lite It's Miller Time campaign and we've already unveiled more spots in 2020 as well. The early results are positive.
Additionally, global Coors Light performance was flat, reflecting its best quarter in over three years and showing improvement in each of our segments. Miller Lite grew in all segments, delivering high double-digit growth in Canada and had its best quarter in the United States since 2014. As we work to aggressively grow our Above Premium business, we see progress in our Above Premium beer and in Above Premium flavored beverages. Volume and NSR improved for the full year 2019 in Above Premium with an acceleration in Q4. We will support this acceleration by providing more fuel to our fastest-growing brands and new innovations in the Above Premium space.
Last month we launched new creative for Peroni in the United States which grew strong double-digits in 2019 and presents a real opportunity for us in 2020. Belgian Moon continues to be one of our biggest success stories in Canada, growing strong double-digits in both the quarter and the year and delivering its third consecutive year of growth. And Staropramen, our check lager celebrated its 150th anniversaries with volumes up high single-digits on the year with strong momentum heading into 2020 as Q4 volume and revenue grew double-digits.
We have launched two big bet innovations in the United States already with Blue Moon Light Sky and Saint Archer Gold. Light Sky is a low-calorie low-carb beer brewed with tangerine peel. It's a great product that pushes the Blue Moon brand into incremental occasions and consumers.
Saint Archer Gold is a premium light lager that offers a better-tasting alternative to Michelob Ultra as proven by independent expert beer panel. We introduced consumers to Saint Archer Gold with a broad media campaign that kicked off during the professional football championship game and showcases how the brand is the better-tasting light beer.
Our Jensen Blake portfolio again outperformed the U.S. craft market in 2019 growing 16% per AC Nielsen versus a flat craft market. In January, we agreed to acquire Atwater Brewery, a regional craft brewer in Michigan. It fills a geographic void, gives us the still spirits capability, and will help position our craft portfolio to continue outperforming the broader craft market.
We're investing more in flavored malt beverage and whitespaces that differentiate us and allow us to reach more consumers. Building on our 2019 successes, in the United States, we will continue to invest behind Cape Line sparkling cocktails which were Nielsen top 10 growth brand for 14 consecutive weeks in 2019. And we're expanding La Colombe hard coffee to additional markets.
In Canada, we will continue to invest in Mad Jack, popular FMB that was up double-digits on the year. And next month, we will launch Vizzy in the United States, a hard seltzer that offers differentiated ingredients which would help it carve out a meaningful space in the seltzer category.
And lastly, we're expanding beyond the beer altogether. This is a big shift, but it presents real growth opportunities. In November, we announced an equity deal a long-term partnership with L.A. Libations, an incubator of better-for-you non-alcoholic beverages. This investment essentially creates a new non-alcoholic innovation team for the Molson Coors Beverage something -- something that we simply did not have before.
Now, I want to be clear we are not looking to compete in the soda aisle with Coca-Cola and Pepsi Cola. And stable we're selective about where we compete, always looking to leverage our unique strengths.
Then, of course, next month we're taking a definitive step into the wine category with a national launch of Movo wine spritzers in the United States. The organizational restructuring is well underway and we are making progress towards our goal of improving efficiency and unlocking an additional $150 million in annual savings bringing our total expected cost savings to $600 million over the 2020 through 2022 program. We have simplified our structure from four business units and a corporate center to two streamlined units; North America and Europe.
In North America, our new organizational design is now set. All teams have been selected and people are transitioning to new office locations. In Europe, we have announced all senior leadership changes and anticipate completing the reorganization by the end of March.
As part of our updated structure we have a new data and analytics team and are expanding and developing new commercial and operational capabilities that will make us smarter and more efficient. We continue to estimate the cost of all these changes will result in total one-time charges in the range of approximately $120 million to $180 million spread over Q4 of last year 2020 and 2021.
Next quarter we will report our financials under our new operating structure. As you can see we are moving quickly to implement our plans and we're starting to see glimpses of transformation within our portfolio. Also the new structure is already providing greater clarity and accountability. Teamwork has improved and the speed of decision making is substantially quicker. None of this is easy and it won't happen overnight. But the tough decisions we've made and the quick actions and investments we are making will ensure the Molson Coors Beverage Company is built to succeed in today's marketplace.
And now I'm going to hand over to Tracey for a review of the fourth quarter and full year as well as our outlook. Tracey?
Thank you, Gavin and hello everyone. I will first cover the quarter and full year on a consolidated and regional basis and then move on to our outlook. So to recap the quarter, net sales revenue increased 3% in constant currency. We delivered positive global pricing and mix as well as a 1% increase in financial volume including a planned benefit in the U.S. from shipments exceeding brand volume as full year shipment volumes and retail volumes converged.
Net sales per hectoliter on a brand volume basis increased 1.1% in constant currency, reflecting continued favorable global pricing and mix. Our Europe business continues to deliver strong in sales hectoliter increases, driven by both pricing and mix.
In North America we saw a sequentially lower increase in our U.S. business and slightly lower rates in Canada. Remember general price increases have largely shifted from the fall to the spring in the U.S. with the most recent increase last spring.
Our U.S. mix benefit was neutral in the quarter. Worldwide brand volume decreased 1% and financial volume increased 1%, reflecting a planned benefit in the U.S. as we shipped largely to consumption for the full year. Global priority brand volume increased 1.6%. In the U.S., brand volumes benefited from improving industry volumes.
October 2018 was soft, following a general price increase and improving premium last segment trends as you heard in Gavin's remarks. Canadian volumes remained challenged in the fourth quarter, driven in part by continued industry softness.
In Europe, our brand volume benefited from a broad-based improvement in industry trends and continued premiumization. Our international business brand volumes grew double digits, driven by strong performance in Latin America.
Underlying cost per hectoliter increased 1.7% on a constant currency basis driven by inflation and mix and partially offset by cost savings. The trend was significantly improved versus prior quarters, primarily reflecting fixed cost absorption in our U.S. business resulting from shipment timing between quarters and the stacking of one-time costs in our Canadian business from 2018.
Underlying MG&A decreased 6.3% on a constant currency basis, due to a non-recurring vendor benefit in the U.S. and lower one-time incentive compensation expenses driven by the anticipated departures as a result of the revitalization plan. These items together account for approximately 50% of the reduction in MG&A.
Additionally, our marketing spend was lower in the fourth quarter, reflecting a planned shift of spending to support brand launches earlier in the year and align our marketing pressure with the key selling seasons, particularly within Europe and the U.S. As a result, underlying EBITDA increased 15.8% on a constant currency basis.
Recapping the year, net sales revenue decreased 0.6% in constant currency. We delivered positive global pricing and mix but this was offset by a decline in global volume. Net sales per hectoliter on a brand volume basis increased 2.9% in constant currency, driven by favorable pricing and mix as we continue to focus on premiumizing our portfolio. Worldwide brand volume decreased 3.5% and financial volume decreased 4%. Global priority brand volume decreased 2.2%.
Underlying COGS per hectoliter increased mid-single digits, up 4.9% on a constant currency basis, driven by inflation mix and volume deleverage, partially offset by cost savings. Underlying MG&A decreased 0.9% on a constant currency basis. Corporate underlying MG&A was $150 million – $158 million coming in below prior year and below our prior estimates, driven largely by lower incentive compensation expense and other targeted spending reductions. Marketing spend per hectoliter was up for the year in each of our segments.
As a result, underlying EBITDA decreased 2.6% on a constant currency basis. Depreciation and amortization expenses were $827 million in line with prior year results but below our prior estimates driven by later and lower-than-planned capital expenditures. Net interest expense of $273 million was in line with our third quarter estimate.
We delivered underlying free cash flow of $1.370 million in line with our estimates and 3.7% below the prior year, driven by lower underlying EBITDA and higher cash tax payments, partially offset by lower capital expenditures, favorable changes in working capital and lower cash interest payments.
Capital expenditures of $593 million were lower than our prior estimate driven by savings and the timing of capital spending as we evaluated and made capital decisions to drive stronger returns. In 2019, we completed our three-year savings program associated with the MillerCoors acquisition and integration, delivering $230 million during 2019 and brining our three-year total savings to $725 million. Cost to capture the savings over the three years were $208 million coming in at the low end of our most recent estimate of $230 million, driven by the addition and delivery of high-value low-cost projects.
So this takes me to our financial outlook. We expect 2020 to be a transition year and anticipate net sales revenue to be flat to down low single digits on a constant currency basis. We expect underlying EBITDA to be down high single digits on a constant currency basis from fiscal year 2019 underlying EBITDA of $2.364 billion.
Our estimated underlying effective tax rate is 20% to 24%. We expect interest expense of $280 million plus or minus 5%. And we expect depreciation and amortization expense to be approximately $850 million. We estimate capital spending of $700 million plus or minus 10%; and underlying free cash flow of $1.1 billion plus or minus 10% reflecting lower expected EBITDA performance, as well as higher cash taxes than in 2019.
And as mentioned on our Q3 earnings call, we increased our total cost savings program for the period 2020 through 2022 to $600 million as a result of the revitalization plan to be spread more evenly over that period. Now as a reminder we are planning to reinvest these additional cost savings behind our brands and other capability-building.
With the exception of costs that would qualify for special items treatment all other costs to achieve the $600 million in savings are included within our underlying EBIT guidance. Examples of special items included in the $120 million to $180 million of cost to achieve are severance, retention and relocation costs associated with the revitalization plan.
Accelerated depreciation and other direct costs associated with the Urbandale Brewery closure will also be reported as special items. We expect 2021 and thereafter to deliver net sales revenue and underlying EBITDA growth versus 2020.
We intend to maintain our investment grade credit rating. And as our full year 2019 trailing annual underlying EBITDA has our current annualized dividend within our target range of 20% to 25%, we do not anticipate the Board of Directors will change our dividend rate at this time.
The change in structure to two business units went into effect at the start of the year. Therefore the resulting financial reporting changes will be reflected in our first quarter 2020 results including allocation of corporate MG&A expense to our two business segments.
Now also please consider the following related items. Our estimate of 2020 EBITDA is unchanged versus our estimate on October 30, 2019 in spite of a strong fourth quarter benefiting from onetime items shipment timing and the food spending as we refined our revitalization plan.
Our business continues to face a number of headwinds including inflation. And we are committed to investing to improve our top line performance. While we expect the full year's underlying EBITDA to be down high single digits on a constant currency basis, we expect the second half EBITDA to be better than the first half for two main reasons.
Our full year increase in marketing investments will begin in half one, as we launch new products and add support to our premium brands and the cost savings that we expect to realize in 2020 will be skewed to the back half of that year.
In January we announced the decision to close our Urbandale Brewery. The associated cost savings are not considered part of the revitalization plan, but are included in the previously announced $600 million cost-savings program for 2020 to 2022.
Now with that thank you for your time and attention and I'll turn it back to Andrea for Q&A.
[Operator Instructions] And our first question comes from Eric Serotta of Evercore. Please go ahead.
Good morning. Gavin, hoping you could give us a little bit of color on the seltzer and beyond beer strategy. Seems like you're taking a very different path than some of your competitors in not extending your core brands. Is there any thought to a Coors Light seltzer or Miller Lite seltzer? And what are you hearing from retailers and distributors, in terms of initial response to what you're showing them for Vizzy?
Thanks. Good morning, Eric. Look, we believe that the seltzer category is here to stay. Let's be clear about that. And Molson Coors plans to compete in this space aggressively. And we are going to have a multi-pronged approach to attacking that space. Having said that, the key premise with our approach is to drive incrementality by being a very clear point of difference to that of the competition.
And as you referenced, this year we are introducing Vizzy which we think does have clear points of difference with the competition. It will be the first-type seltzer made with acerola cherry, which is a super fruit higher in the antioxidant, vitamin C. And there's no reason to believe that this isn't going to resonate very well with consumers and particularly that 25 to 39-year-old male and female that choose to drink, but are looking for potentially better choices.
I'm not going to get into details of how much exactly that we're investing, but we've got a very robust campaign that launches around the same time as Vizzy hits the shelf. It's going to include national TV. It will have digital, social, out-of-home advertising and a very strong sampling effort.
This is going to be our biggest bid yet on the hard seltzer segment, which we think will reach a couple of billion dollars in sales this year. As far as the response from our distributors and retail is concerned, we've had an excellent response. There is a lot of excitement and anticipation for this brand. So we're excited about it.
And just to follow up on that, would you rule out -- you talked about a multipronged approach. Would you -- and you have Henry's in the market, but would you rule out doing something with one of your core beer brands? I know you've gone down that road in the past with things like Coors Light Summer Brew, but decided to stick true to the core product and messaging. Is that something that's on the table or something that you'd rule out?
Look, I think, Eric, just reiterating what I said, right, is we think that we need to have a clear point of differentiation to our competition. And where we find a clear point of differentiation, we will drive into that in a meaningful way. Our current is Vizzy, which is what we're going to put a lot of time and effort behind it.
Great. Thanks so much, Gavin.
Our next question comes from Bryan Spillane of Bank of America. Please go ahead.
Hi. Good morning, everyone.
Good morning, Bryan.
Hey, Bryan.
So, I guess, Gavin, I want to touch on just kind of the state of Coors Light. Now that you've had the new ad copy in the U.S. on air for a few months now and you've kind of gone through this process now of kind of featuring your plants the retailers selling in for the summer season. So, could you just give us a little bit more color about how you feel about not just how the copy has resonated with consumers and for the brand, but also just as you're kind of teeing up merchandising for the summer months, do you feel like you're getting a little bit more reaction or support from your wholesalers and retailers behind the Coors Light brand?
Thanks Bryan. I mean the short answer is yes. We're getting a lot of support, a lot of excitement behind Coors Light from our network. Certainly the most -- since I've been in this chair and when I was in the MillerCoors as well. The MillerCoors platform is stronger. Results are strong. The brand achieved its best quarterly STR trends since the first quarter of 2017.
It accelerated segment share gains in the fourth quarter behind the new creative and we're going to invest meaningfully behind this platform in 2020. It's brought relevance back to the brand again. It's back in the lives of new legal-drinking-age consumers, its back in the cultural landscape, and its momentum is heading in the right direction Bryan. And we're just getting started. But the short answer to your question is yes; our wholesalers are very excited about it.
Okay, great. Thank you.
Our next question comes from Steve Powers of Deutsche Bank. Please go ahead.
Yes, great. Thanks. Tracey could you talk a little bit more about the targeted spend priorities for 2020? And just clarify maybe confirmed that the cadence of those investments specifically on the MG&A line will more or less mirror 2019. I think that's what I heard but I just wanted to clarify.
And then relatedly Gavin I guess for you what does success look like in terms of a topline response or maybe a market share response this year on the back of all of the planned initiatives that you outlined versus to what degree may it take until 2021 or beyond for these 2020 investments to show more of a cumulative return? Thanks.
Yes. Thanks. Great. Thanks Steve. Look Tracey you can maybe take some of the G&A side. I'll just talk about marketing. From a marketing perspective, we've got a lot of innovation and new news coming in the first half of this year Steve. So, you can expect our marketing spend to be up-weighted in the first half versus the second half.
And as you -- I mean I know Tracy has given full year guidance on EBITDA and we're not going to give quarterly guidance. But I think just directionally we're going to spend more in the first half than we will in the second half. We've already launched two big innovations Saint Archer Gold and Blue Moon Light Sky and we've got two more big ones coming with Vizzy and with the national expansion of Movo.
Obviously, innovation takes a lot of work and a lot of effort and a lot of investment and you don't necessarily get a significant uplift on day one. And so we don't necessarily expect that. But we do expect improvement in our Above Premium portfolio through these innovations.
A success for me looks like what I've really said right, which is we do expect us to be sort of flat to down low single-digits from a net sales revenue point of view. But we believe everything that we're doing in 2020 is setting ourselves up for sustainable growth in NSR in 2021 and beyond. Tracey from a G&A point of view?
Yes. So just maybe to reiterate what I said in the script from a G&A, I mean we are -- the G&A spend is basically in the EBITDA guidance that we've given. A couple of things to think about as we look at half year one and half year two. First of all as Gavin mentioned our marketing spend is going to be up. That will be sort of weighted more to the first half of the year as we invest behind our new product launches and support our premium brands.
And then from the cost-savings side that's going to be skewed more to the back half of the year and as we realize the savings related to the revitalization plan. And again the revitalization plan savings will be primarily in the G&A area.
Okay. Thank you very much for that. I guess Gavin just to follow-up on the definition of success question. There's just -- there’s a ton of new products from yourselves, from competitors in the beer space hitting the market right now. It's going to be a lot of shifts on shelf and within coolers. Is your feel in aggregate that you're going to hold cumulative shelf and cooler space in 2020 versus 2019, or do you expect to gain or maybe shed some of that? Just how are you thinking about that? Thank you.
Yeah. Look I mean I would be disappointed if we didn't increase our shelf space. I do think though that there's going to be movements within that. So, in large format I think you'll see some of the slow-moving lines in craft and seltzers and some of the adjacencies like FMBs and sides. We'll probably take some losses to create new space for a lot of these innovations that are coming particularly the growth of seltzer.
I mean initial indications would appear that the biggest loss is taking place with craft, which the assortment of that has just expanded significantly over the past 15 years. I think in small format it's a little different. Seltzer is making aggressive inroads on distribution in both single-serves and multipack. And I would say more space is probably coming from economy as well as craft in less developed, which -- because craft is less developed than it is in large format.
But again the short answer to your question is, I'll be disappointed if we didn't increase our shelf space with some of the innovations that we're bringing. And certainly the indications from our retailers and our distributor partners is that that will hold true and will expand both.
Perfect. Thank you.
Our next question comes from Andrea Teixeira of JPMorgan. Please go ahead.
Good morning. Thank you. So I wanted to -- should we step back into the organization of the two main regions between the U.S. and Europe? And is that a main strategy to give better visibility and empower the local teams, or could you potentially sell the business to fund M&A in seltzer, or you want just to grow greenfield in that category?
And just a clarification on Gavin's comments about Vizzy. So for Vizzy -- so you believe that -- which launches I believe last month. So you -- I think I heard you say that the brand can reach $1 billion in sales. And so if that's the case what is the time line?
No. Sorry Andrea. You misunderstood me there. I said the -- what I meant to say was the seltzer category will get into the $1 billion as a category. I mean, I would be delighted if Vizzy did, but that's not what I said. I think the total category will be there.
As far as the two business units is concerned we're obviously setting the European and North American businesses up as stand-alone operations, because we believe that strong regional leadership will be able to make decisions much quicker. It will streamline decision-making. It will remove bureaucracy, which perhaps slowed us down. It'll certainly make us more nimble and quick. And it's a very short distance between folk that are asking for decisions and the actual decision-makers. So we think that having two separate stand-alone business units is going to make us much better as an organization, much stronger in both Europe and in North America.
So we're actually already seeing the signs of that, where we've been able to bring campaigns with some of our global brands to market, much quicker than we have in the past outside the Coors Light campaign in the United Kingdom as a fine example of that. So we're particularly excited about the nimbleness of this new structure will bring us.
And in terms of capital allocation going forward, if you can kind of elaborate more. How do you see the company like in five years?
Lot capital allocation is the critical decision that we make. But if you're asking me indirectly are we planning to sell Europe? The answer is no.
Yes. I guess exactly indirectly and directly. And then in M&A seltzers, you believe that the decision to just do the way the greenfield is the best decision at this point?
We're very excited about the multipronged approach that we're using to attack the seltzer space, Andrea. I think I said on our third quarter earnings call that we will have a string of pearls' approach to M&A. It's worked very well for us in the past and we've had many more successes with the small bolt-on acquisitions that give us capability and exposure to spaces that we haven't had. And if successful and we intend to continue along that path.
We really did that in the fourth quarter with the large but minority stake in Libations and we have an agreement to acquire Atwater in the – hopefully the first quarter of this year. That's an approach that's worked for us. It's worked for us very well in Europe with a number of success stories out there with Doom Bar and Aspall Cider and the repatriation of our Staropramen brand. So if it works for us, then we're going to continue driving on that path.
Thank you, Gavin.
Our next question comes from Kaumil Gajrawala of Credit Suisse. Please go ahead.
Thank you. Good afternoon, everybody. I'd like to understand a little bit more about your EBIT guide for 2020. It looks like Coors Light and Miller Lite, at least sequentially you're showing some momentum. You've got considerable cost-savings strategy and benefit next year. And then, obviously, also, you have some, I guess, one-times in the G&A line this year from incentive comp and this vendor benefit. So why do you then expect for kind of a similar rate of decline of revenues to lead to quite a bit higher decline in EBITDA? I think this year you'll end at EBITDA down four on revenues down two, roughly. But for next year, you're looking at revenues maybe down two, but EBITDA, high single-digits with all of these things that seem to be going kind of moving in your favor next year?
Thanks, Kaumil. Good morning to you. Look, 2020 is a transition year for us. It's going to take time to get the $150 million of savings out of the business. And we're implementing major actions that are fundamentally going to impact our portfolio, and many of these actions are going to take time for us to impact the top line.
I think I said earlier on, innovations take time to scale, and spending more money on marketing, doesn't necessarily have a day one positive impact. We believe that the changes that we're making now which are meaningful will set us up for success in 2021. We're also taking very seriously the industry trends that we're seeing in Canada and the impact that those trends are having on our overall business and the overall topline of our business.
We're obviously implementing the revitalization plan in Canada as well and we'll be investing more behind those brands. But you know -- Canada has been in decline for quite some time and it's not a trend that we're going to be able to reverse overnight, having said that, we're working very hard to do exactly that.
Okay. Got it. Thank you.
Thanks.
Our next question comes from Kevin Grundy of Jefferies. Please go ahead.
Thanks, good morning everyone.
Good morning Kevin.
Gavin, I wanted to come back to the investment question, maybe ask it little bit differently. So obviously, a lot of changes going on concurrently at the company, while a lot of investment is going into the portfolio, particularly in the first half of the year.
Can you give us a sense of how you're prioritizing these investments? Is this continued sequential improvement in Miller Lite and Coors Light do you have to establish some level of success in the hard seltzer category?
I'd say the market view on that front would be that -- the hard sell-through dynamic is a net negative for the company at this point, given some of the demand source from light beer category and the fact that the company has not really leaned in real heavily at this point. Maybe just give us a sense of the top three things, you really have the organization focused on in order to deliver what you've messaged to the street? Thank you.
Yes. Thanks Kevin. Look I mean, it's not an either/or, right, it's a both end. We need to focus across our portfolio and we've been quite clear about the fact that our core brands in the United States, in Europe and in Canada remain a very important part of our business. And so we will increase the spend behind those brands going forward.
Having said that, the bulk of our increased spend will be in the above premium space. We need as I've said to fundamentally reshape our portfolio. We've done that successfully in the United Kingdom.
We're about 30% of the – of their portfolio is now in the above-premium space. And if I recall correctly Canada is at about 20%-odd. And obviously we've got a lot of ground to make up in the United States. And that's why most of our investment -- increased investment is going to be in the above-premium space and beyond beer in the U.S..
To that end, we launched Cape Line in 2019 which was a top share gainer in Nielsen for us, I think it was 14 straight weeks. We've introduced Sol Chelada. We're introducing Sol Lemon. I probably pronounced that incorrectly. We've got Belgian Moon up in Canada which grew strong double digits. In Europe, we've made progress and we'll continue to invest in above-premium.
I think I answered the seltzer question earlier on. There's not much more I can say to that other than that we're making a big bet behind Vizzy and we're very excited about how it's being received by retailers and distributors alike. We're expanding beyond the Bira with Movo.
I think the speed at which we are moving and the quantity of ideas that we're bringing to the marketplace has energized our network as -- I haven't seen it this way for quite some time. So we've obviously got a lot of work to do, but I'm pleased with the progress that we've seen across our portfolio.
That’s great. Thanks again.
Our next question comes from Lauren Lieberman of Barclays. Please go ahead.
Great. Thanks. Good morning. I just wanted to follow up a little bit on innovation again. And I was curious, in particular, about Blue Moon Light Sky? I know it's quite early days, but turning around Blue Moon would take a -- be a pretty big step forward for the above-premium portfolio. So it's a little bit off season maybe to be launching or to have gotten that brand into market. But I'm just curious, on early reads from that, what you're kind of seeing the feedback on the taste profile? Does it bring Blue Moon users back or drinkers back into the category? Anything you could share there would be great. Thanks.
Thanks, Lauren. Look, Blue Moon -- just to start at the top. Blue Moon grew in 2019 globally. So very excited about that, just for starters. Secondly, we tested Blue Moon Light Sky extensively and consumers absolutely love the taste. It's a lighter, more sessionable beer that is going to really be complementary and provide a halo effect to Blue Moon Belgian White.
It's been in the marketplace for two weeks. The reception from our distributors has been very strong. Their orders are meaningfully higher than what we had anticipated and we're obviously working very hard to make as much Blue Moon Light Sky as we can. But I would caution you, Lauren. It's two weeks. But so far it's being extraordinarily well received.
And how might you rank order the potential impact of like a Vizzy versus a Blue Moon Light Sky for this year? Because you're, on the one hand, leveraging an existing and very strong brand; and the other very strong category, but new-to-world brand.
Yes. That's a great question. And, obviously, I'm excited about all our innovation. And I'm not going to handicap which one is going to turn out to be the best this year, Lauren. Time will obviously tell. But each of them are unique in their own way. They're all attacking a different part of the segment. And best way for me to answer that question is, time will tell.
Okay. Great. And then, just a follow-up on Canada. I know you talked about putting this -- having more of a North America organization and the opportunity that gives you to leverage the marketing spend cross-border, if you will. I was just curious, if any of that started in 2019. So, maybe, it's a little of housekeeping. But, for example, like the Coors Light campaign that's been so successful here, is that in Canada yet, or is that still to come?
Lauren, that is still to come. It's not in Canada yet, but it will be soon. So as far as the revitalization plan is concerned, obviously, the restructuring took place with the U.S. business in the fourth quarter of 2019. But the Coors Light campaign specifically is still to hit. I'm pleased with the progress that the team has made in aligning innovation and our global brands between United States and Canada in our North American business unit. And I think you'll start seeing the impact of that as the year progresses.
Okay. Thanks great. Thank you so much.
Our next question comes from Laurent Grandet of Guggenheim. Please go ahead.
Hey. Good morning, Gavin and Tracey. I'd like to come back to the seltzer category, but from a different angle. So, it's great to see us so many growth initiatives coming from you, including a differentiated seltzer proposition. So, now, as the seltzer category is expanding very fast and in many cases, at the expense of our beer and light beer for the largest part, I mean, what do you do to protect your core Coors Light and Miller Lite business? And if you any effect I mean let's say 20% of the $150 million revitalization plan on those two brands it may prove to be not enough. So, could you please help us first I mean better assess the impact of seltzer on your core two brands? And two what do you -- are you planning to minimize the risk here? Thank you.
Yes. A lot to unpack there Laurent, but let me try and do that. So, I would point you to the performance of Miller Lite and Coors Light in 2019 when seltzers were exploding. And according to Nielsen, the trend has continued of gaining share for those two brands for the last five years.
Our performance on Miller Lite and its 21st consecutive quarter and it actually grew STR volume in Q4 in the face of this seltzer trend. So, the brand is holding its own in the total category. In fact it was pretty flat not just in the premium light segment, but in the total beer category.
And as a combination Miller Lite and Coors Light outperformed the combination of Bud Light, Michelob Ultra, and Michelob Ultra Gold in terms of industry share. So, this notion that a lot of the seltzer volume is coming from premium light is not necessarily supported by the facts that are underlying the Miller Lite and Coors Light's performance.
Coors Light gained segment share for the third straight quarter directionally improved its performance had the best quarterly STR trend since 2017. So, we believe that our marketing is resonating. We're going to put more effort and money behind that at the same time as we are going to enter the seltzer category.
Thank you.
Our next question comes from Sean King of UBS. Please go ahead.
Hi, thanks for the question. I don't think you provided guidance for COGS per hectoliter into 2020. Any insights you can provide there and if you expect any easing pressure from aluminum given hedging positions?
Yes. So, let me answer that Sean. So, for 2020, we've actually given both topline and bottom-line guidance which is new this year. And so we didn't feel it was necessary to give the COGS guidance. We thought top and bottom-line was more helpful.
Having said that, look our job is to manage our costs within those boundaries of top and bottom-line. And we do use -- we spoke about our robust hedging programs in the past and we've got cost-savings initiatives which help us manage those costs. But we expect to still see ongoing commodity inflation going into 2020 probably similar to what we saw in 2019. And yes, we will just manage that with our cost-savings initiatives.
Got it. Thank you.
[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Gavin Hattersley for any closing remarks.
Thanks Andrea. Look I know there may be additional questions that we weren't able to get to. So, please follow up with Greg and Tracy and I look forward to talking with many of you as the year progresses. So, thanks everybody for participating on the call.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.