Less than a year after launching the brand, MillerCoors is ending production of Two Hats, the fruit-flavored lagers aimed at younger drinkers who increasingly are being lured away by wine and spirits.
The beer will no longer be sold by early next year.
The decision reflects the challenges facing macro-breweries beset by rising costs and flagging sales. Chicago-based MillerCoors announced its decision to "pull the plug" on its company blog Monday, less than a week after parent company Molson Coors reported disappointing revenue and profit results for MillerCoors for the fiscal quarter.
Under CEO Gavin Hattersley, who was named CEO in September 2015, the proclaimed mission at MillerCoors has been to stop the volume sales decline by 2018 and return to growth by 2019.
That appears unlikely at this point and impossible without turning around Coors Light, its top-selling beer that is in steeper decline than Miller Lite, the company's other flagship beer. In the company's Behind the Beer blog on Monday, MillerCoors executives said they planned to focus spending behind Coors Light and Miller Lite, while also increasing investment in "above-premium" brands like Sol and Arnold Palmer Spiked.
Two Hats, a 4.2 percent alcohol beer lightly flavored by lime or pineapple, was targeted at 21- to 24-year-old drinkers but didn't stand out in its brief run in a crowded marketplace. Both flavors brought in less than $1 million in revenue in year-to-date data ending July 15, according to retail sales figures from Chicago-based market research firm IRI, which do not include sales at Costco or liquor stores.
By comparison, Coors Light made more than $1.2 billion in sales in the same time period, according to IRI data, which represented a decline of about 4.2 percent from the same period a year ago.
Beer sales, in general, are having a tough summer. Domestic beer shipments are down 3.7 percent through June compared to last year, according to the most recent data available from the Beer Institute, the trade group that represents the largest beer companies in the U.S.