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Molson Coors Brewing Co  (NYSE:TAP)
Q4 2018 Earnings Conference Call
Feb. 12, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Molson Coors Brewing Company Fourth Quarter and Full Year 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions)

Before we begin, I will paraphrase the Company's safe harbor language. 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 the 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.

Regarding any non-US GAAP measures that may be discussed during the call, please visit the Company's website www.molsoncoors.com and click on the Financial Reporting tab of the Investor Relations page for a reconciliation of these measures to the nearest US GAAP results. Also unless otherwise indicated, all financial results the Company discusses are versus the comparable prior year period and in US dollars.

Our call will open with remarks from Mark Swartzberg, Vice President of Investor Relations. Please go ahead.

Mark Swartzberg -- Vice President of Investor Relations

Thank you, Gary, and good morning everyone. Following the prepared remarks this morning, management will take your questions. (Operator Instructions)

Now I'd like to turn the call over to our CEO, Mark Hunter.

Mark R. Hunter -- President and Chief Executive Officer

Thank you, Mark, and hello, and welcome everybody. With me this morning are Tracey Joubert, the CEOs of each of our business units; Lee Reichert, our Chief Legal and Corporate Affairs Officer, and Brian Tabolt, our Global Controller. Today, Tracey and I will take you through our plans to drive long-term shareholder returns, highlighting our fourth quarter and full year results and discussing our outlook for the business. And you can also find related slides on Investor Relations page of our website.

We accomplished much in 2018. We delivered strong free cash flow, and we met our deleverage commitments. We restored underlying EBITDA growth in the quarter and the second half, and we continue to premiumize our portfolio across our regions, including launching Truss, our Canadian cannabis beverage JV, scaling volume and profitability in our fast-growing international business, and continuing to strengthen our European business.

Through the year, we further scaled our cost saving program, which insulated us in part from the effects of weaker industry demand in North America, higher-than-anticipated inflationary pressures, and challenges associated with the implementation of our US brewery supply chain system.

We entered 2019 with the US commercial plan focused on mix and share improvement that's fully resourced and showing early signs of impact against Coors Light, a commercial strategy that's working in Europe and International, and continually improving commercial trends in Canada. We are focused on further strong free cash flow delivery and deleverage supported by more than $200 million of cost savings in 2019 and a further $450 million of cost savings across 2020 to 2022.

We remain committed to our plan to reinstitute a dividend payout ratio in the range of 20% to 25% of annual trailing underlying EBITDA upon achieving around 3.75 leverage, which we expect to occur around the middle of 2019. Against this backdrop of progress and commitments, let me share more about what you can expect from our strategy of earning more, using less and investing wisely before handing the call to Tracey to elaborate on the quarter, the year and our outlook.

In terms of earning more, we will continue to build even stronger commercial excellence capability with a focus on portfolio premiumization and disruptive growth to drive mix improvements. Almost 20% of our volume is comprised of Above Premium brands, and this figure continues to grow, and we see considerable headroom for added growth in all of our markets.

In International, we enter 2019 with an optimum cost structure, improved brand profitability, and a portfolio of Above Premium brands, gaining strength in our focus markets. In Europe, our strategy of strengthening our core national champion brands while premiumizing the portfolio is well developed and working. In Canada, industry trends have been challenging, but our total share trend has improved three quarters in a row, and pricing continued to show positive improvement. We will continue to improve Coors Light share trends while premiumizing the portfolio and preparing for the launch of our Truss portfolio.

In the US, while we were dissatisfied with the 2018 top line and share performance, we also believe we have the strategy, people and commercial execution to drive improving performance in 2019 and the longer term. We anticipate further contraction of the US beer industry volumes, which we plan to offset by adding resources to accelerate our portfolio premiumization and improve our industry volume share trends.

Using less is our second platform and is designed to fuel growth and protect our bottom line performance. We are over-delivering on our original cost savings plans for 2017 through 2019, allowing us to offset inflation and protect marketing investment, and as Tracey will cover, we expect to unlock another $450 million of savings over the period 2020 through 2022. These savings are driven by our sustainable productivity driving initiatives such as World Class Supply Chain 2.0, our greenfield breweries in Canada, Global Business Services, new IT programs and our ongoing procurement efforts and more rigorous ZBB across the entirety of our business.

Investing wisely is our third platform, and you know our commitment to deleverage and increase cash returns. Similarly, we are committed to spending our marketing dollars more effectively than ever by scaling investment behind accelerated portfolio premiumization and through the full adoption of our ROMI approach and increasing sophistication of our investment planning. I also want to highlight that our spending is often understated by third-party aggregators, reflecting our shift of increasing amounts to digital and experiential platforms.

So with that backdrop, over to you Tracey.

Tracey I. Joubert -- Chief Financial Officer

Thank you, Mark, and hello everybody. Before I share consolidated and regional financial highlights, I would like to remind you of the new revenue recognition accounting standard, effective from the beginning of 2018, which we will refer to as revenue recognition for the remainder of the prepared remarks today. As outlined in our earnings release, revenue recognition had no significant impact to net income for the full year, but did cause some timing differences between quarters, positively impacting EPS by $0.04 this quarter and impacting some year-over-year comparability for net sales and MG&A, primarily in the US and Canada this quarter. Please refer to our SEC filings for more detail.

Separately, you may have noticed that we filed an 8-K this morning, indicating that we restated our 2016 and 2017 financial statements for a technical income tax accounting matter related to the acquisition of the remaining 58% of MillerCoors in 2016 and subsequent remeasurement of deferred taxes in 2017 resulting from the recent US Tax reform. These restatements did not have an impact on our reported underlying pre-tax income, underlying earnings per share or underlying free cash flows for 2016 and 2017 as these issues related to items that we previously excluded.

Further, such corrections do not impact our anticipated future cash tax benefits resulting from acquisition, future effective tax rates or are otherwise indicative of the underlying performance of the business. Please refer to our SEC filings for more detail.

I will speak to the quarter and year on a consolidated and regional basis and also our outlook. We continued to see some of the same pressures in the fourth quarter as we did during the first three quarters of the year, mainly industry declines in North America, as well as inflation in the US. Our fourth quarter results were also impacted by the timing of inventory levels in the US, which drove a further reduction in our financial volumes over brand volume. However, these metrics largely converged for the full year.

While these negative factors had an unfavorable impact on our top line results for the quarter, we exercised flexibility and discipline in the P&L, and as a result, delivered underlying EBITDA growth of 3.9% on a constant currency basis. This was driven by positive global net pricing, brand volume growth and underlying business performance in Europe and International, cost savings and cost mitigations, as well as reductions in our MG&A expenses.

The full year results were impacted by the same factors, and were further adversely impacted by cycling the indirect tax reserve reversal in Europe, which drove the decrease in underlying EBITDA of 1.5% on a constant currency basis.

In the US, we grew underlying EBITDA 6.4% in the quarter driven by lower MG&A expenses, higher net pricing and favorable impact of the new revenue recognition standard, partially offset by lower volumes, cost inflation and negative sales mix. Lower MG&A expenses were due to spending optimization and efficiencies, as well as lower employee-related expenses including incremental cost reductions related to the restructuring initiated in the third quarter and lower employee incentive expenses. Overall, US brand volumes declined 5.1% on a trading-day-adjusted basis for the quarter and domestic sales to wholesalers declined 8.9%, in part due to quarterly timing of wholesaler inventories which ended 2018 at normal levels of inventory.

In the quarter, our brand volumes remained below industry trends. However, we made progress with our top priority, Coors Light, as the brand reversed its negative segment share trend and launched its new marketing campaign near the end of the quarter, reintroducing our cold-activated packaging to a whole new generation of legal-aged drinkers. Miller Lite increased share of Premium Lights for the 17th consecutive quarter, while holding total beer industry share, according to Nielsen. Above Premium performed below our expectations, but we are excited about our 2019 plans to accelerate premiumization of the portfolio.

Our full year US underlying EBITDA decreased 1.5%, driven by lower volumes, higher COGS as a result of higher transportation costs, aluminum inflation and volume deleverage, as well as negative sales mix, partially offset by lower MG&A expenses and higher net pricing. However, we delivered high-single-digit underlying EBITDA growth in the second half due to improved sales to wholesaler trends, our accelerated NSR per hectoliter growth in the fourth quarter, and the incremental cost reduction initiatives we executed. On a full-year basis, brand volume and STWs largely converged as brand volume declined 3.9% and STWs declined 4.4%.

For the year, we gained market share within the Premium Light segment, while our Economy brands gained segment share and held share of total beer industry, according to Nielsen. In Above Premium, we established a foundation for growth by successfully introducing Arnold Palmer Spiked, established Peroni as the fastest growing European import, and relaunched the Sol brand, while our Regional Craft brand growth continued to far outpace that of the craft segment.

In Europe, underlying EBITDA decreased 7.8% in local currency in the quarter. And this was due to lapping last year's partial release of a bad debt provision and the adoption of revised industry guidelines for calculating excise tax in one of our major European markets. We also continued to invest in our First Choice Agenda during the quarter, aiding further growth in our volume and brand mix. Brand volume increased 3.3%, reflecting improved performance of our Global, Above Premium and National Champion Brand portfolios. We have also continued to expand the reach of our business geographically through our European Export and License team, improving PACC and increasing our absolute volume, royalty income and profit, although this does dilute our NSR per hectoliter. Our European export and license business now represents approximately 8% of our Europe brand volume, and we expect its strong growth to continue.

Full year underlying EBITDA in Europe decreased 8.2% in local currency primarily due to the reversal of the indirect tax provision in 2017, but was up 4.3% excluding the effect of this reversal. Our European business grew brand volume 2.2% as well as improved its brand mix. Global Brands, Above Premium and National Champion brand portfolios all grew and more than offset losses in the value category as we executed our strategy to premiumize our portfolio. We also expanded our portfolio through the acquisition of the Aspall Cyder brand portfolio and are currently performing ahead of our acquisition business case. We also continued our disciplined approach toward optimizing marketing investment and cost control.

In Q4, our Canada underlying EBITDA decreased 12% in local currency, driven by lower volumes, negative sales mix, one-time supply chain inventory write-offs, and inflation, partially offset by cost savings and a 2.7% increase in net sales per hectoliter in local currency before revenue recognition. MG&A, excluding the impact of revenue recognition, was flat in local currency.

Brand volume decreased 2% as a result of lower volumes in the West and Ontario, partially offset by growth in Quebec. The introduction of Miller High Life early in the year and growth from Coors Banquet and Belgian Moon was more than offset by declines from other brands, including Coors Light and Molson Canadian.

Full year underlying EBITDA in Canada decreased 4.1% in local currency, driven by lower volumes, negative sales mix, one-time supply chain inventory write-offs, and inflation partially offset by cost savings and a 0.9% increase in net sales per hectoliter in local currency before revenue recognition. MG&A, excluding the impact of our revenue recognition, was up 2.3% in local currency.

Brand volume decreased 2.2% driven by industry declines in the West. The introduction of Miller High Life and growth from Belgian Moon were more than offset by declines from other brands, including Coors Light and Molson Canadian. Our total share trend has improved three quarters in a row, and Coors Light share of segment also improved three quarters in a row improving to flat in the fourth quarter.

In International, underlying EBITDA on a constant currency basis improved by $3.1 million in the quarter driven by increased profitability through a shift to local production in Mexico, higher brand volume in our focus markets, and lower MG&A. This was partially offset by unfavorable sales mix.

Brand volume increased 1.1% driven by organic growth in our focus markets, led by Miller Lite, Blue Moon, and Miller High Life. Net sales per hectoliter decreased 18% in constant currency driven by the shift to local production in Mexico in favor of a license model, resulting in higher margins.

Our International business has increased its profitability substantially over the past year as we improved underlying EBITDA by approximately $19 million on a constant currency basis to $22.5 million, driven by the same factors as in the fourth quarter as well as improved profitability of our International focus brands, Coors Light, MGD and Miller Lite.

Brand volume increased 2.2% driven by organic growth in our focus markets, led by Miller High Life, Miller Lite, and Blue Moon. Net sales per hectoliter decreased 6% in constant currency as the shift to local production in Mexico occurred as planned during the second half of the year.

Now, moving to outlook, our earnings release provides full details of our guidance. As Mark said, we remain committed to our plan for rating agency leverage of approximately 3.75 times EBITDA around the middle of 2019, and the dividend intentions and EBITDA margin expansion guidance we communicated in June are unchanged.

In terms of cost savings, we remain confident in the $700 million of savings for the three years ending 2019 and now also plan an added $450 million for the period 2020 through 2022.

Procurement and supply chain, including brewery optimization, constitute the majority of these new savings, with IT and Global Business Services also contributing to the $450 million. We expect these savings to help fund our internal investment plans and the costs of achieving the savings, as well as offset input inflation, spread evenly over the period 2020 through 2022.

We expect our International business to deliver a strong double-digit percentage increase to underlying EBITDA in constant currency for full year 2019. We estimate our underlying free cash flow of $1.4 billion, plus or minus 10% this year. We believe the main components of the difference between the midpoint of our estimate and consensus are lower estimates of capital spending, remember, we are still optimizing our brewery footprint in Canada; and higher estimates of cash taxes paid as a result of one-time opportunities realized with tax reform in 2018.

We are no longer communicating guidance on cost of goods sold per hectoliter by business unit in favor of estimated cost of goods sold trends on a total company basis. Now, of course, the US remains the biggest driver of our cost of goods sold, and in 2019, we expect US costs of goods sold per hectoliter to increase at a similar rate to our estimated consolidated percentage increase of up mid-single-digits. This amount reflects hedges on aluminum and other key inputs, is per hectoliter, and is on a constant currency basis versus 2018.

As shared earlier, our US distributors ended 2018 with typical levels of inventory. This was below what we expected on our last earnings call due to lower-than-anticipated inventories outside of the Milwaukee brewery orbit. Milwaukee did see the expected build in preparation for the February go-live. We expect to complete implementation of our new ordering system across our US brewery network over the course of this year and foresee shipments converging with STRs for the year. Keep this in mind as you consider quarterly phasing in 2019.

In November, we announced that we reached a settlement, amicably resolving all outstanding issues in the Pabst case, and as you know, these terms are confidential. The original contract still has a number of years to run and, for the near term, has not changed. At this point, I'll turn it back to Mark.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Tracey. Earning more is one of the three platforms by which we drive PACC, and this pillar is built on our First Choice commercial excellence approach. I'd like to give you some evidence of that by region, followed by a few comments on the increasing potential of our enterprise growth actions. In the US, Miller Lite continues its strong segment trend, while Coors Light's relative performance improved with the brand holding share of segment in Q4.

In 2019, we have plans to accelerate our Above Premium portfolio through higher investment. We plan to double our media spend on Blue Moon, the Number 1 national craft brand, air national advertising for Peroni for the first time, build on a very successful year one for both Arnold Palmer Spiked and Sol. We'll also increase Henry's Sparkling presence in the fast-growing hard seltzer category, focusing on the brand's clear product differentiators of zero sugar and only 88 calories, and introduce a number of innovations, including Cape Line, Saint Archer Gold, Crispin extensions and Sol Chelada, all before this summer.

Our US business enters 2019 having further strengthened its position as the trusted category captain across chain accounts in both the off and on premise. And more broadly, our customer excellence performance is market leading and improving further, as evidenced by the Advantage Survey results. And allied to this, we have ramped up our e-commerce approach within joint business plans and continue to build competitive advantage through our technology enabled field sales teams with tools such as BeerMate, which we are now rolling out globally. We are also thrilled to welcome Michelle St. Jacques as the new Chief Marketing Officer and Brian Erhardt, as our new Chief Integrated Supply Chain Officer for the US business.

Our new Coors Light advertising is now on air, and we know we are moving in the right direction with the brand, allowing us to take even more share in Premium Lights. Coors Light will continue to emphasize its cold Rocky Mountain positioning as the World's Most Refreshing Beer. It will also invest more than ever on digital and social channels to engage and recruit 21 to 34-year-old drinkers.

Miller Lite, the original light beer with less carbs and calories, will further enhance its competitive messaging to drive greater consumer affinity and brand switching from its major competitor.

In Europe, we continue to move in the right direction. Our brand volumes are growing and premiumizing. Our National Champion portfolio inflected to positive volume growth last year, our global brands continued to grow well in excess of the industry, and our Above Premium and craft portfolio also contributed to growth and mix.

Our First Choice for Customer focus is also strengthening our customer relationships. For example, according to the Advantage Survey of UK retailers, we rate Number 1 in the Multiple On-Trade across all beverage suppliers.

We are delighted our National Champion brands in Europe had such a solid year, and we still aim for more. Our largest brand, Carling, has just begun a major new 360-degree campaign called Made Local, which started this month, and continue through 2019 and continue to strengthen the brand's market-leading position.

Finally, in Europe, we are exporting and licensing our brands to multiple new markets. We are generating increasing profit from this business and are excited about its future because it's low capital intensity and offers considerable room for growth.

Our First Choice commercial excellence approach and capability is building in Canada too. As I mentioned earlier, in terms of commercial performance, there are multiple highlights. Our total share trend has improved three quarters in a row, and Coors Light's segment share also improved three quarters in a row, improving to flat in the fourth quarter. Craft volume grew driven by Belgian Moon and Creemore, and our non-alcoholic portfolio of Coors Edge and Heineken 0.0 is delivering strong volume and segment share growth.

In the value segment, we delivered strong share growth driven by our simplified portfolio strategy and the launch of Miller High Life. As we look at 2019 and beyond, we are excited by the potential we see from our innovation pipeline. Coors Slice, for example, is an innovation that strengthens the Coors trademark, and we are encouraged by the tests behind our pending introduction of Aquarelle, our hard sparkling water.

Our commitment to customer excellence includes the adoption of BeerMate to strengthen field sales management and promising joint business plan pilots with key customers. For example, a pilot with Ontario's LCBO is producing beer category growth well in excess of the total industry performance.

Our two largest brands will benefit from new advertising, brand redesign, and innovation in 2019. For Coors Light, we launch our new The Mountains Are Calling campaign and introduce new packages, including a new chill pack in time for summer, and the Molson trademark enters 2019 with a new brand redesign and communication platform expected to unlock latent passion for the brand.

The Miller trademark returned to our portfolio in 2016, and we plan to build on a very successful 2018, building awareness and distribution of Miller High Life -- excuse me, since its launch early last year and adding to the success of MGD in other non-US markets by expanding the brand's availability and above premium positioning.

As you know, the MillerCoors transaction also gave us the opportunity to get bigger internationally. In 2017, we began executing plans for improving our portfolio, route to market, and profitability simultaneous with undertaking structural changes adding approximately $100 million in revenue to this business.

Last year was year one of our new International strategy, targeting focus markets and implementing the many actions that have dramatically improved profitability. These include our shift to local production in Mexico, favorable changes in the pricing of Coors Light, MGD, and Miller Lite and accelerated growth of Blue Moon and Miller High Life, and stand-out performance at retail.

International's recent wins include MGD capturing leadership of Paraguay's premium segment, our new Blue Moon Tap House in Panama, the first of many, and strong growth across our portfolio in Latin America and India.

Looking forward, our International business will remain committed to top and bottom line growth driven by continued focus on portfolio mix improvements, building capabilities to expand within our priority markets and potential strategic entry into new markets.

Now, clearly, we are more than the sum of our regions, and our enterprise growth team is helping our business unlock that value through our global brands, customer excellence, and disruptive growth.

Our Global Brands span many markets and still have enormous potential. Coors Light continues to show very strong volume growth in Europe and is contributing to an improvement in region profits in Mexico, where we reduced promotional intensity. Miller Lite is responding positively to the change to its original white packaging in over 20 markets, and MGD and Miller High Life are showing significant growth outside of their home markets from LatAm to Europe to India.

Staropramen outside of Czech Republic continues to grow strongly across Europe, responding positively to its new visual identity with consistent messaging, and finally, Blue Moon continues to grow in multiple markets, and we expect it to return to growth in the US this year.

There are many examples of our success delivering customer excellence from the roll out of BeerMate to the introduction of our B2B online platform, to the use of advanced analytics to drive category growth, to embedding our e-commerce approach into joint customer business plans. And this approach has been recognized through multiple customer surveys across North America and Europe.

Innovation and disruptive growth represents approximately 7% of our net sales. We continue to reenergize our core brands expanding to new occasions, including low and no alcohol. We also continue to expand the footprint of our portfolio into new and emerging segments such as sparkling cocktails and hard sparkling water. Additionally, we have a range of initiatives such as Truss, which we expect to launch its non-alcoholic cannabis infused beverages portfolio in the fall of 2019 following legalization in Canada, the expansion of Blue Moon Tap Rooms and our entry into markets such as Kombucha. All of these initiatives are underpinned by continuous investment in our brewing capability and R&D.

Finishing on PACC and our efforts to drive shareholder value, we are pleased to be deleveraging at the pace we committed to and we look forward to upping our cash returns to shareholders later this year, continuing our balanced approach to capital allocation, and unlocking the top line opportunities in front of us through our First Choice for consumer and customer agenda.

Thanks for your time and attention so far today. And with that, I'll turn it back to Mark.

Mark Swartzberg -- Vice President of Investor Relations

Thank you, Mark, and good morning again, everyone. Just a bit of housekeeping, we look forward to meeting with many of you over the course of the year and various corporate access events are scheduled for the year. I also want you to know we plan to host an Investor event similar to the one held historically in June every two to three years. Between such meetings, we plan to continue our many other forms of corporate access, including headquarter visits, field trips, non-deal roadshows, and broker conferences. I wanted to take care of that housekeeping item. And I think Gary, if you're ready, we'll open the line to questions.

Questions and Answers:

Operator

We will now begin the question-and-answer session. (Operator Instructions). The first question comes from Andrea Teixeira with JPMorgan. Please go ahead.

Andrea Teixeira -- J.P. Morgan -- Analyst

Hi, good morning everyone. Mark, Tracey, I was hoping if you can bridge your assumptions for the 2019 free cash flow guidance, what are you assuming for pricing in 2019 particular for the US as I believe one of your competitors is moving their pricing earlier this year to April. So -- and then, second question is on the clarification you gave on the cost save, is it being reported like going forward, I think, starting in 2020 as part of underlying. So are you moving to a GAAP reporting for EBIT, and can you give us an idea of the cost to achieve those additional $450 million in savings like, I know you probably had about $230 million, if I do the math right on to achieve the $700 million by the end of next -- the end of this year? So can you give us like the costs -- the expected cost to achieve the $450 million? Thank you.

Mark R. Hunter -- President and Chief Executive Officer

Hi, Andrea. It's Mark here. I think there was probably three question areas in there, free cash flow, pricing and cost saving. So Tracey, do you want to talk a little bit about free cash flow and then Gavin, do you want to talk about pricing position in the US and then, we'll come back and cover cost savings. So Tracey, just go on free cash flow.

Tracey I. Joubert -- Chief Financial Officer

Yes. So our free cash flow guidance, and Andrea, for 2019 is the $1.4 billion plus or minus 10%, and that does include the cost savings that we had communicated. But this year, getting to $700 million. I think your question, I'm not sure that I understand the US GAAP EBIT question, but let me answer the $450 million of cost savings. And the cost to capture includes both CapEx and OpEx, and those will be including -- included in underlying. So -- and in the past when we stated our cost savings and synergies, it was a portion that was included -- that wasn't included in underlying. Those were one-time costs. But going forward, the CapEx and OpEx will be included in all the underlying guidance that we gave you.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Tracey. The other thing just to mention on our free cash flow. Obviously, the free cash flow excludes any asset disposals and we anticipate disposing of our Montreal brewery after (ph) 2019, so that will be additional cash to help support deleverage, but not reported within our free cash flow and we'll update you on as we conclude that process a little bit later this year. Gavin, do you want to pick up on pricing and the pricing environment within the US?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Sure, Mark. Thanks and good morning, Andrea. And let me just say first of that from a pricing point of view, it's been fairly consistent over many years in the sort of 1% to 2% range. We are particularly pleased with the progress that we made on pricing in 2018 and Q4 was a good quarter for us from a net revenue perspective. Sales mix remains a big focus area for us. We were down 70 basis points in the fourth quarter and obviously, our focus and a lot of our efforts is going toward premiumizing our portfolio in 2019 and improving the overall sales mix of our US business unit.

From a pricing point of view, Andrea, I would point you to again that pricing has been fairly consistent over the years. We evaluate our pricing on a market-by-market basis. We priced our products in the best interest of the brands to optimize revenue in each and every market. So, we evaluate competitive pricing, but we don't share our strategies overall publicly.

Mark Swartzberg -- Vice President of Investor Relations

Okay. Thanks, Gavin. Thanks, Tracey. Andrea, thanks for your questions. Hopefully we have managed to cover all parts of that. Gary, back to you.

Operator

The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.

Dara Mohsenian -- Morgan Stanley -- Analyst

Hi, guys.

Mark R. Hunter -- President and Chief Executive Officer

Good morning.

Dara Mohsenian -- Morgan Stanley -- Analyst

If I look at your MG&A line in the US in the last couple of years is down about 30%, which is a pretty large decrease in that line item. So can you give us some kind of sense for how much of the decline is due to lower advertising spend in the US, particularly given Mark's comment alluding to the available third-party data, sometimes missing some of your spending on digital or other areas?

And then second, as we think going forward, you've obviously talked about your desire to improve US market share and volume trends. There is a more aggressive innovation cycle and marketing levers -- levels from your key competitors in the US, some of that's even targeted directly your brands. So going forward, do you think you need to reboot spending significantly behind the US business either in advertising, R&D or any other areas going forward? Thanks.

Mark R. Hunter -- President and Chief Executive Officer

Let me pick that up and Gavin, I'll trying to hit the high spots and let me know if I miss anything. I mean, if you look our MG&A line across our business, not just in the US, we've been working very hard on two fronts. One is to make sure that we've got cost base structure for future and we've taken some significant steps right across our business and obviously through the second half of 2018 to actually reduce our overall cost base. And we've been working really hard of removing or reallocating what we describe as non-working marketing dollars and really getting that right at the front end of our business. That's allowed us to actually take some reductions in some marketing spend, but we don't break that out by region, because it's competitively sensitive.

And linked to your second part of your question, the focus on our business is making sure that we've got a marketing or advertising that's really working for us and that's clear as we came through 2019 that we were suboptimal with two or three of our brands in the US. So, the focus is less on incremental spending, but much more on making sure that we've got work that really connects with consumers and changes behavior. And there's plenty of examples of brands in the marketplace that have increased their spending and have no impact on their overall brand performance.

We're very focused on specification of our targeting, the productivity of our marketing investment and the strength of our creative work. And '18, I think, demonstrated that we still had some improvements to make and I think that's one of the reasons we're excited about Michelle joining our team. And she is on board and I believe will have a big impact on the quality of our marketing work in the US. But Gavin, anything else you would add to that or have I covered all the bases?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

I think you covered all the bases there, Mark. Maybe I can just add in Q4 specifically. Obviously, we had the restructuring, which we talked about in the last earnings call. And obviously, we had -- we've had employee-related cost reductions as a result of that. And then of course, we didn't have a particularly good year last year. We have smaller or much smaller annual incentive payments to employees, which also would have reduced MG&A in the fourth quarter.

Mark Swartzberg -- Vice President of Investor Relations

Okay. Thanks, Gavin.

Dara Mohsenian -- Morgan Stanley -- Analyst

Okay. That's helpful. Thank you.

Operator

The next question comes from Judy Hong with Goldman Sachs. Please go ahead.

Judy E. Hong -- Goldman Sachs -- Analyst

Thank you. Good morning. So I guess my question is just in terms of the US beer industry volume trends. Clearly, second year in a row that I think volume has gotten worse and it sounds like maybe 2019 you don't really expect things to get better. So I just want to understand how you're thinking about the industry volume trends playing out in 2019.

And then for kind of in this reality of persistent volume declines for the industry, how does that shape your strategy going forward, because a lot of the things that I think you're talking about -- I'm not sure if there's meaningfully different than what we've kind of heard in the past. So I guess I'm just wondering strategically over the next few years, how should that strategy evolve if we're going to see the industry continuing to see volume decline 1% to 2%.

Mark R. Hunter -- President and Chief Executive Officer

Let me start with the second part of your question. And Gavin, do you want to just offer a perspective around kind of the industry drivers. And the second part of your question Judy, I would come back to really the continued expansion of the margin pool or the revenue pool in the US. So, yeah, there's pressure on volume, but consumers are drinking slightly less but better for one of a headline and that means that our strategy in terms of our portfolio has got to be accelerated premiumization of that portfolio. That's work that we indicated that we were leaning into very hard. As we go into -- came into 2018, that's why we've made the additions to our Above Premium portfolio and that's why I indicated on our -- on my script earlier that we are doubling down on, in particular, Peroni, Blue Moon and Sol, as well as our innovation agenda.

So it's no different to what we've done in our European business over a number of years where we've consistently reshaped the portfolio. I mean, out of our European business, we're close to 30% of our volume is in Above Premium. We're underrepresented in Above Premium. And while we continue to protect, defend and stabilize our large brands, Coors Light and Miller Lite, we must accelerate the pace of premiumization in our portfolio. So that's second part of your question in terms of our response. Gavin, do you want to just talk about the drivers on the beer industry, more generally?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Sure, Mark. Good Morning, Judy. Look, I mean our estimates are aligned with yours, right, which is at the full year 2018 industry trend was pretty similar to that 2017. And some of the bigger drivers, the overall health of the industry is the weakness of the biggest brands, Bud Light, Miller Lite, Coors Light, and obviously Mark talked a little bit about what we're doing there.

Growth in the wine and spirits has continued and as an industry, we must -- we need to be pro-beer first and a lot of our innovation is focused in that particular area. Consumer demographics continue to evolve whether it's styles, whether it's flavors and we obviously need to resonate with those consumers. And again, our innovation is focused there. I think the beer industry has become increasingly fragmented with a significant number of new SKUs that have been added in recent years and it's creating confusion at retail and our big chain customers are recognizing that and are dialing back on the proliferation of SKUs and then, there's a whole host of other micro-cuts. That's what we're doing about it, but I think Mark covered that of in enough detail, but our focus is obviously Miller Lite and Coors Light and driving strong growth in Above Premium.

Judy E. Hong -- Goldman Sachs -- Analyst

Okay. And then Gavin, just one clarification, the STW versus STR. So the fact that outside of Milwaukee, the inventory came down. Does that reverse in 2019 or is it just the reality of maybe on a lower STR trend? And then the higher inventory levels in the Milwaukee brewery, does that also reverse, so net-net, we're looking at a wash just in terms of inventory levels in 2019?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Yes. Look Judy, I think what -- I think, the message you should take away from an inventory point of view is we always try and drive convergence between sales to wholesalers and sales to retailers and this year won't be any different. There will be moves, obviously Milwaukee will come down, but Albany will go up as we get ready for the Albany roll-out. So there will be an increase in net over to net leading roll-out to Irwindale that will elevate during that particular period of time, but from a full-year perspective, I think the message is, we try and drive convergence between those two.

Judy E. Hong -- Goldman Sachs -- Analyst

Got it.

Mark R. Hunter -- President and Chief Executive Officer

And Gavin, just building on that Judy, I think we were pretty clear as we came through 2018 and that's what we expected to occur on a full year basis in 2018, with STWs and STRs converging by the year-end and they did do that. The encouraging thing is as we've started 2019 certainly based on all of the Nielsen data, the trends from an STR perspective for the MillerCoors portfolio are -- have improved materially versus what we saw in the fourth quarter.

Judy E. Hong -- Goldman Sachs -- Analyst

Understood. Okay, thank you.

Operator

The next question comes from Robert Ottenstein with Evercore ISI. Please go ahead.

Robert Ottenstein -- Evercore ISI -- Analyst

Great. I think you've kind of got to what I was going to ask, so you're just really talking about the Q4 in the US. Surprisingly -- a little bit surprisingly, was that more a function of your business or the industry and again, you just sort of touched on it. The -- some of the scanner data is better in January, the beer producers, MBWA (ph) Index was positive, kind of the best reading in sometime in January. Can you give us any sense of how we should kind of be looking at these various data points in terms of what's going on with the calendar issues, issues with holidays, issues with the weather, just trying to get a better feel of what's actually going on with the US market over the last four months? Thank you.

Mark R. Hunter -- President and Chief Executive Officer

Gavin, do you want to dive into some of the detail around that?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Sure. Yes. Hi, Robert. Look, I think there are obviously a number of factors that drive our third quarter performance and industry overall. Some of them were duplicative. So the industry did have a fairly meaningful price increase in the fall of 2018, which drove some loading into Q3 and the industry felt a fall out of that in Q4. The overall beer industry, Robert, in the fourth quarter was pretty weak. We actually improved our overall share trends in Q4 versus where we were in Q3.

And then of course, we, from which is relative to us, have large restructuring, which were surely disruptive to our own internal system. As Mark said, the fourth -- the first sort of six weeks are interesting. I mean, obviously, we'll have to see how it transpires over the course of the full quarter. But we're very encouraged by the results for both the industry and for MillerCoors. And if you take the last four months from October through January, industry is performing pretty similarly to that, which it did in the whole of 2018 and the whole of 2017.

According to Nielsen, our year-to-date has improved to down low-single-digits compared to the mid-single-digits we saw in Q4. Coors Light and Miller Lite are driving stronger performance, with Coors Light also improving to down low-single-digits, while Miller Lite according to Nielsen is now firmly in positive territory year-to-date, keeping pace with the industry. It's only six weeks Robert, but we're confident in our new Coors Light marketing campaign. We've got -- think we got the right message with Miller Lite and we've got a really exciting lineup on above premium initiatives, which we are going to execute in the first part of this year.

Robert Ottenstein -- Evercore ISI -- Analyst

Can you give us maybe just a little bit better sense of what's going on in terms of key channels on-trade, off-trade, for instance? Is there any particular weakness or strengths there?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

I think, traditionally, the on-premise has been a little weaker, foot traffic is down a little bit. I don't think that's a trend that changed in the fourth quarter in any meaningful way, Robert. Pretty consistent with what we've been saying in the past.

Robert Ottenstein -- Evercore ISI -- Analyst

Okay. And in terms of the encouraging results for the first six weeks of the year, do you think that's weather related or anything that you can hang your head on?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Well, I'm not going to get into the weather-related side of it, because we have good weather and we have bad weather all over the country. I think six weeks is a -- is just about half the quarter and we'll have to see how the quarter transpire. There were some -- a few timing differences between the end of last year and the beginning of this year from an overall industry perspective, Robert. But we had some good weather weeks, and we've had some bad weather weeks. They will kind of wash out in the fullness of time.

Robert Ottenstein -- Evercore ISI -- Analyst

Great.

Mark Swartzberg -- Vice President of Investor Relations

And Robert, this is Mark Swartzberg. To be clear what Mark and Gavin were talking about was the Nielsen data that you have.

Robert Ottenstein -- Evercore ISI -- Analyst

Yes.

Mark Swartzberg -- Vice President of Investor Relations

So, they are commenting on the data that you can draw conclusions from as well.

Robert Ottenstein -- Evercore ISI -- Analyst

Okay. Thank you, Mark.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Robert.

Operator

The next question comes from Bryan Spillane with Bank of America. Please go ahead.

Bryan D. Spillane -- Bank of America Merrill Lynch -- Analyst

Hey, good morning everyone.

Mark R. Hunter -- President and Chief Executive Officer

Hi, Bryan.

Bryan D. Spillane -- Bank of America Merrill Lynch -- Analyst

So I just wanted to get -- come back to the questions around the net leverage target for the middle of the year. And one I guess in the presentation, it just says leverage, so -- or is it gross or net that you're targeting to get to 3.75?

Tracey I. Joubert -- Chief Financial Officer

The 3.75 is under rating agency calculation. So, I mean really you want to take our cash into account, (inaudible) but it does take a number of items such as pension, et cetera. So, yeah, it's EBITDA over net debt basically.

Bryan D. Spillane -- Bank of America Merrill Lynch -- Analyst

Okay. All right. Great. Thank you.

Mark R. Hunter -- President and Chief Executive Officer

Bryan, that's been consistent with how we've described it for the last three years and consistent with the commitment we gave in the middle of last year as well. So there's certainly no change there. And we are pleased with where we ended up at the year-end and very much on track to strengthen the balance sheet and continue to delever and raise our dividend as we've indicated.

Bryan D. Spillane -- Bank of America Merrill Lynch -- Analyst

Okay. Great. Thank you. And then I guess the second question I had is just relative to Brexit, is there anything that is I guess contemplated in your outlook or your plans for this year that have any kind of provisions that you might have to take to the extent that you get a hard Brexit?

Mark R. Hunter -- President and Chief Executive Officer

Let me ask Simon to pick it up. He is intimate with Brexit. Do not sensitize (inaudible). He is certainly intimate with it, so Simon?

Simon Cox -- President and Chief Executive Officer of Molson Coors Europe

Yes. Thank you, Bryan. And I think it's probably important to just understand the shape of our UK business. We are very much a UK producer for the UK market within the UK. So, while we do import small amounts of volume on the things like the Rekorderlig Cider, we do exports small amounts of volume of things like Carling to tourist markets in Spain. We are generally speaking and not really exposed to the absolute import/export side of it.

The most of the impacts would be some of the macroeconomic things you might think about, but honestly speaking, we're not unduly concerned by Brexit. UK business continues to perform very strongly. We've made sensible provisions as you would expect still on things like managing supply chain, imported goods to make sure that we don't run out of critical supply that do come from the continent. And overall, I wouldn't say get significantly into account in terms of modeling our European business.

Bryan D. Spillane -- Bank of America Merrill Lynch -- Analyst

Okay, great. Thank you.

Mark Swartzberg -- Vice President of Investor Relations

Thanks, Bryan.

Operator

The next question comes from Lauren Lieberman with Barclays. Please go ahead.

Lauren Lieberman -- Barclays -- Analyst

Thanks, good morning.

Mark R. Hunter -- President and Chief Executive Officer

Hi, Lauren.

Lauren Lieberman -- Barclays -- Analyst

Hey, I wanted to ask a little bit the COGS per hectoliter guidance. So I think Tracey, you said in the US, it sounds like you're expecting it to be in line with the overall Company guidance for mid-single-digit inflation, and could you really help disaggregate a little bit logistics just conceptually, I'm sure she won't give numbers, but logistics versus raw materials and also to the degree which volume deleverage is playing into that, because I just would have thought that the inflation would not have been as significant given lapping the Midwest premium dynamics and freight costs? Thanks.

Mark R. Hunter -- President and Chief Executive Officer

Tracey, do you want to talk to her?

Tracey I. Joubert -- Chief Financial Officer

Yes, a couple of things to consider, Lauren. So we do have a robust hedging program in place and we are very comfortable with our hedge position across all of our commodities. And one of the things we will suggest you consider is as we go into 2019 -- if you remember back in 2018, one of the biggest drivers of our aluminum costs was the Midwest premium and the Midwest premium only significantly increased toward the back half of the first quarter of last year. So -- and for the first part of the year we did have lower Midwest premium and since it hasn't come down, it's still sort of in that $0.19 a pound range. So we got back to consider and then inflation from the freight point of view is still bit of an issue. It hasn't come down to the extent the other commodities have. So we're still dealing with that. And that's why it's important as we look at our cost savings for this year is to mitigate that inflation that we are continuing to see from some of the commodity headwinds as well as the freight environment.

Lauren Lieberman -- Barclays -- Analyst

Okay. And then, so just following on that, the geographic mix for cost savings, I know you talked about the $450 million plan going forward. But in terms of the $200 million-ish that's quote left for '19, isn't it reasonable to assume that well more than half of that is flowing to the US?

Mark R. Hunter -- President and Chief Executive Officer

Yes. Lauren, it's Mark. I mean, we haven't broken out geographically our cost savings program. We broke out the big drivers across procurement, IT, supply chain, et cetera. So, we haven't given guidance. I mean if you look out the shape of our business and where our costs actually reside, I think you can draw your own conclusions where those costs should actually flow through. But we haven't given specific guidance, but I think you can do a reasonably easy kind of match exercise on that one to work that through.

Lauren Lieberman -- Barclays -- Analyst

Okay. All right. Thanks so much.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Lauren.

Operator

The next question comes from Amit Sharma with BMO Capital Markets. Please go ahead.

Amit Sharma -- BMO Capital Markets -- Analyst

Hi, good morning everyone.

Mark R. Hunter -- President and Chief Executive Officer

Hi, Amit. Good morning.

Amit Sharma -- BMO Capital Markets -- Analyst

Couple of follow-ups and then one for Mark. Tracey, the cost saving $450 million is clear, you talked about a more of those costs to achieve this will fall to -- in the operating, can you give us a sense or how much of total we should model for to achieve these costs? And then for Gavin -- Gavin, you gave the pricing commentary, it's very market-by-market as fully understood. But if you had an opportunity to take another round of pricing to follow up your competitor, are you open to that or is that also contingent on how you're looking at your share performance? And then I have one for Mark after these two.

Mark R. Hunter -- President and Chief Executive Officer

Okay. So Tracey, do you want to kick off on the cost savings?

Tracey I. Joubert -- Chief Financial Officer

Yes. So -- and we're not giving a cost to achieve a number just because it is going to be part of our underlying, so it is included in all of our underlying guidance, including the CapEx guidance and the operating margin guidance, so it's between OpEx and CapEx. But we're not giving detail around that.

Mark R. Hunter -- President and Chief Executive Officer

Gavin, do you want to pick up on pricing?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Sure. Amit, I can't really give you anything more than I gave you earlier on, right? We don't provide forward guidance on pricing. What I can say to you is that pricing has been fairly consistent over the last few years. We've been pleased with our revenue management process over the last year and you can see that demonstrated in the fourth quarter. And obviously, one of the inputs into our revenue strategy is competitive pricing. So once we assess what's going on in the competitive environment, we'll do what's best for our brands to optimize revenue.

Amit Sharma -- BMO Capital Markets -- Analyst

Got it. And then, Mark, just a question for you. I mean, very clear your focus on free cash generation and then use that to grow dividends, starting next year as well. But if you look at the stock price, the market doesn't seem to be rewarding that capital allocation strategy. So just wondering is there -- is this up for debate at the Board level or are we pretty set on this course at least in 2019 and '20?

Mark R. Hunter -- President and Chief Executive Officer

Yes, we've had, I think, pretty good debate at the Board level and with our Finance Committee. We feel very good about the plan that we've laid out through the first half of 2019. Clearly, if there was anything unexpected happened relative to our estimates of our business performance and our stock, then we'll obviously reengage with our Board and our Finance Committee. But we've laid out a plan and we are committed to that plan.

And I think one of the things that we've endeavored to do in our business as we kind of prep for and executed the MillerCoors transaction and then drove through integration and deleverage is to deliver on the commitments that we've made. And this is a commitment that we've made, because we feel that we are uncompetitive from a yield perspective. We want to reset that. But the thing to be reminded is that resetting our dividend and our competitive yield still then gives us pretty significant flexibility beyond that move. So if you look at our overall free cash flow and the cost of increasing our dividend and we still have flexibility as we get through the second half of 2019 and then to 2020.

So, our capital allocation strategy, our own brand-led growth opportunities, further balance sheet strengthening, or further return of cash to shareholders will always be on the table. And I don't think that's in anyway undermined by our commitment to step up our dividend from the middle of 2019, so the flexibility still exists beyond that commitment, Amit.

Amit Sharma -- BMO Capital Markets -- Analyst

Got it. Thank you so much.

Mark R. Hunter -- President and Chief Executive Officer

Thanks.

Operator

The next question comes from Steve Powers with Deutsche Bank. Please go ahead.

Steve Powers -- Deutsche Bank -- Analyst

Great. Thank you very much.

Mark R. Hunter -- President and Chief Executive Officer

Hi, Steve.

Steve Powers -- Deutsche Bank -- Analyst

So Mark, -- hey. So if we could start with International, I think you called out an expectation for strong double-digit EBITDA growth in the International business in 2019. And I was hoping you could just expand upon the drivers there, clearly good progress made in '18, but I guess what are the big stepping blocks as you see it in 2019?

Mark R. Hunter -- President and Chief Executive Officer

Yes. Well, obviously, we changed the leadership of the International team just over a year ago with Sergey stepping in, and he has driven a very, very focused game plan there where we have really consolidated the markets that we've prioritized in the brands that we're driving and really, really worked to stepping up our partner engagement and accountability. So we have a stronger brand portfolio. We're in markets that we believe that we can go much deeper in terms of our overall brand scale, and we've now got a cost base I think fit for purpose that allows us to scale up the business without any significant additional costs. So all of the volume or contribution upsides gives us the opportunity to flow that through the business going forward. So a really good progress. We delivered again on our commitment in 2018 in terms of the step-up in our International performance, and we have a high degree of confidence in our ability to continue to generate strong double-digit EBITDA growth in that business. Sergey, probably it's all of your glory there.

Steve Powers -- Deutsche Bank -- Analyst

Okay. Thank you very much. And sorry, Sergey, did you want to add?

Sergey Yeskov -- President and Chief Executive Officer of Molson Coors International

No. That's (inaudible) earlier.

Steve Powers -- Deutsche Bank -- Analyst

Okay. Very good. And then if I could follow up Gavin just netting out the comments you made in response to Judy's question I believe and also Robert's, can you just drill down or maybe add a little bit of clarity, attuned the anticipated cadence of STWs throughout the year relative to STRs trends. I think Tracey might have mentioned in her prepared remarks, but I missed some of it. Just when I look at that all the moving parts and kind of interpret what you said earlier, I'm assuming you receive some shipment timing benefits in the first quarter and perhaps the first half before then reverses, but I just wanted to sanity check that assumption. Thanks.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Steve. Gavin, can you pick that up?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Yes. Sure, Mark. And Steve, look at, I mean, again from an overall annual point of view, we plan for convergence between the two. We don't give quarterly guidance. And I don't think Tracey gave that either. Obviously, we had some shipment challenges out of Golden last year, which are fairly well known and our brewery roll-out subsequent to that have been much more positive. So that will obviously give us some benefit in 2019 when you do a strict compare against 2018. But we are still rolling out the system. Trends in Fort Worth breweries went live last year. It's probably much better than Golden, but that's a big system implementation. We're going to have challenges and we do. Milwaukee and Chippewa Falls breweries just went live and they so far -- it's only been a week, but they're so far performing better than Fort Worth, which is the one that went live before that. So we are getting more and more effective at these roll-outs, as we do them.

Lots of things changed on a quarterly by-quarterly basis, Steve from timing of holidays, timing of shipments and so on. And so, we're not going to give specific guidance on that.

Steve Powers -- Deutsche Bank -- Analyst

Okay. Fair enough. Thank you very much.

Mark R. Hunter -- President and Chief Executive Officer

Steve, the only thing I would add is, as you look at the first quarter, just remember that we're cycling two or three big kind of adjustment year-on-year. Last year, we had indirect tax provision, which had flown through the benefit in 2017. Obviously, it was a headwind in 2018 with some shipment challenges around the Golden Go-Live. I think it was a well documented. The good news is how the team have responded from Golden and our Go-Live subsequent to then certainly have been a lot smoother. And then obviously there's just underlying industry performance. And as we've talked to, this year certainly seems to be off to a more positive start and our trends relative to market are more positive according to Nielsen as well. So just bear those in mind as you contemplate the first quarter.

Steve Powers -- Deutsche Bank -- Analyst

Yes. Thanks, Mark. That's very clear. Appreciate it.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Steve.

Operator

The next question comes from Vivien Azer with Cowen. Please go ahead.

Vivien Azer -- Cowen and Company -- Analyst

Hi, good morning.

Mark R. Hunter -- President and Chief Executive Officer

Good morning, Vivien.

Vivien Azer -- Cowen and Company -- Analyst

So, I really appreciate the commentary around the better trends in the US in the first six weeks of the year. That certainly is apparent in Nielsen. But when I look at your market share and your market share came up a lot, Mark, with your entries in these prepared remarks. I'm trying to understand like how you balance market share aspirations around Coors Light specifically, which is obviously critical to total portfolio performance relative to potential cannibalization, because as I look at your volume share, the Coors Light improvement is apparent, but from a total Company perspective, it seems like at least in the last eight to 12 weeks, that's unfortunately been more than offset by Keystone Light. So number one, is the volume share that you're thinking of versus dollar share? Number two, is it market share target for the total portfolio in addition to Coors Light? Number three, any specific commentary on the interaction between Coors light and Keystone Light specifically? Thank you.

Mark R. Hunter -- President and Chief Executive Officer

All right, Vivien. Well, let me try and unpack that one. So I think Gavin and I have been very consistent as we've come through 2018 that job number one for us in the US business is to start to get our volume performance to match the industry performance. That's not something we think will take six or 12 months, but it's certainly the medium-term target that we've set for our teams and we want to be holding our share of the US industry and alongside premiumizing our portfolio. So really margining up the business, so that is just as simple as I can make the objective we've set for our US team. Clearly, part and parcel of that we have to ensure that both Coors Light and Miller Lite are outperforming the segment that they operate, and Miller Lite is there; Coors Light moving back in that direction.

And as I mentioned in below premium overall, we've actually stabilized that position and actually took a little bit of share. In terms of the cannibalization between Keystone and Coors Light, anything you would add on that particular point, Gavin?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Mark, we've done study after study after study on that because the question comes up periodically. And Keystone Light performs very well in stores where Coors Light is not even available and these are large national chain sometimes where Keystone is one of our only products there. So there is very little interaction with Coors Light. So that's not at of all what's driving it. I mean, what's driving it is and Anheuser-Busch has reacted with their Economy Brands on a 15-pack basis. And so they're driving fair amount of price and value to consumers. And Keystone is going up against that strategy. So Anheuser-Busch copied us and that's impacting our economy share from a Premium Light's point of view. We are very pleased with the performance. Bud Light continues to grow significant here in the Premium Light segment, and Coors Light for the last four weeks is actually also being positive. So we are pleased with that as I've said earlier on.

Vivien Azer -- Cowen and Company -- Analyst

So (multiple speakers).

Mark R. Hunter -- President and Chief Executive Officer

Vivien, your question was about volume share versus value share, so job number one is getting our overall volume to match the industry trends in the US.

Vivien Azer -- Cowen and Company -- Analyst

That's perfect. So, just to summarize to make sure I'm hearing you guys correctly. So the strategy is to manage your volume share at the segment level, so Above Premium, Premium Light and Below Premium and to improve your volume share within each of those segments with the ultimate aspiration of that driving total volume share gains that you have to manage it at the segment level.

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

The only correction there I would make is, job number one is to get to the place where our volume is matching the industry trends or holding our share in the medium term.

Vivien Azer -- Cowen and Company -- Analyst

Understood. Thank you so much.

Mark R. Hunter -- President and Chief Executive Officer

Okay. Thanks, Vivien.

Operator

The next question comes from Laurent Grandet with Guggenheim. Please go ahead.

Laurent Grandet -- Guggenheim Securities -- Analyst

Yes, good morning, Mark and Tracey. Two questions, really one on Coors Light, one on cannabis. For the second one, actually could you please update us on your Truss cannabis JV? Would you be ready to launch new and/or test you product in Q4 and it's become legal in Canada for beverages? And what about your position in regards to CBD products in the US? And on Coors Light, really I mean, one of the early positive signs you are seeing with Coors Light, especially with consumer, I'm not interested in the Nielsen analysis. I'd like to understand if you are seeing any consumer impact if any to the corn syrup, and Super Bowl complaint from your competitor? Thanks very much.

Mark R. Hunter -- President and Chief Executive Officer

Okay. Thanks, Laurent. Let's start with cannabis. Fred's here and Fred obviously has overall accountability for cheering our trust JV. So, Fred, do you want to just talk about status and expectations, as we look for this year?

Frederic Landtmeters -- President and Chief Executive Officer of Molson Coors Canada

Sure. Good morning, Laurent. So we set up the Truss JV back in October last year. And from the beginning, I think we're very clear that their objective was to be ready to capture a meaningful share of the cannabis-infused beverages market from day one of legalization. So, we still expect legalization to happen in the fall of 2019 around the October time. We're currently following up on all the regulatory aspects that are coming into place. And the team are racing to get ready for day one, so they're working on the portfolio, the operational side of the business, and I think in summary, I can say, we're on track to be ready on day one.

Mark R. Hunter -- President and Chief Executive Officer

Yes. I mean, I would add a couple of things. I think we've got a great partner. We feel really good about the relationship. We've got a great leader in the business. And Brett Vye, a very capable team in place, and the portfolio is really starting to come together. So, as Fred said, we will be on the playing field from day one and competing very hard in that marketplace.

I think you also had a question about -- just about CBDs in the US. So, the team that we had working internally on Canada initiative have continued to work on other market opportunities. I think it's too early to comment on the US. Obviously, we're watching where there's a federal approval, and clearly that's something which is important to us, as we're federally regulated. So we're watching the CBD space. We've got team looking at it and it's too early to comment beyond that at this point in time. On Coors Light, Gavin, do you want to pick up on Laurent's question around our competitors' competitive advertising?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Sure, Mark. Thanks. Good morning, Laurent. Look I mean, it's disappointing that ABI has chosen to single-handedly damage the overall health of the beer category -- health initiative by disparaging American farmers and natural ingredients that most brewers, including themselves I might add used quite extensively.

On the positive side, Anheuser-Busch could not have handled it as a better gift if they have tried harder. Our distributors are proud. They are fiercely competitive, and they like nothing more than a good fight. And honestly, Laurent, nothing we could have done, could have fired them up so much. Our employees are just as fired up. In the next few months, it's going to be interesting for sure. My comments around the first six weeks obviously include pre-Super Bowl and post-Super Bowl, which was when the Edwards was flattered. And so that's as close to telling you what's going on from an individual brand point of view as I'm going to do.

But Coors Light has grown its market share over the last four weeks in the Premium Light segment. We've got a new Chief Marketing Officer who actually joined us the day after the Super Bowl, Michelle. Mark referenced to her a little bit on the call. She has been a rising star at Kraft Heinz. She understands what makes brands unique. She's ready to take our brands to the next level, and what she's going to bring us -- bring to us is new ideas and speed, and actually you can see the way we've reacted. And in fact, once we've defined that this was the route that we're going to take, we actually pre-empted the campaign on the Sunday and then followed it up with speed and the number of different angles over the last, sort of, 10 days or so and watch the space.

Laurent Grandet -- Guggenheim Securities -- Analyst

Thank you very much. Really appreciate your response.

Mark Swartzberg -- Vice President of Investor Relations

Thanks, Gavin.

Operator

The last question comes from Kevin Grundy with Jefferies. Please go ahead.

Kevin Grundy -- Jefferies -- Analyst

Good morning, everyone.

Mark R. Hunter -- President and Chief Executive Officer

Hi, Kevin.

Kevin Grundy -- Jefferies -- Analyst

Just as a follow-up question for Fred on the cannabis strategy and, Fred, I think the comment was, you expect to gain meaningful share. So two questions here. Number one, what's the level of investment we should anticipate without putting any exact number, but just sort of order of magnitude that's going to flow through the Canadian segment as you support this effort?

And then two, with respect to strategy, because of course your key competitors are going to be there and look to capitalize on the significant TAM as well, can you give us a sense of how many products perhaps you intend to launch? How you handicap competitive positioning, product superiority? And as we sit here today, what gives you confidence that you will indeed be able to succeed given what appears to be likely a crowded market? So, thanks for that.

Mark R. Hunter -- President and Chief Executive Officer

Fred, I think there's a bundle of questions there for you.

Frederic Landtmeters -- President and Chief Executive Officer of Molson Coors Canada

Yes. The first one, Kevin, the level of investments as you know the costs of the Truss JV are consolidated in our Canadian results, but we are not commenting on the specific investments we're making in the JV. I think it's appropriate to say that the JV is properly funded. We're confident that we've made, together with our partner HEXO, the right level of investments to deliver a strong portfolio on day one of legalization, and I'll leave it there in terms of details to disclose now.

The products to be launched in the marketplace, I mean we've got a very entrepreneurial team in place. They're working hard to get the portfolio ready. There is a lot of emerging ideas, and I think we're in the stage now of confirming what the brand's portfolio is going to look like, but we said from the beginning, you should probably think broadly in terms of beverages that can be infused with cannabis. And at this stage, we don't have many more details to disclose about specific products to be launched.

Mark R. Hunter -- President and Chief Executive Officer

Yes, I think it's fair. It's -- probably around the middle of this year, we will be in a position where we can -- as we start to talk to route to market customers, then we'll be in a position to share more broadly the shape of our portfolio. So if you can just bear with us on that. Clearly, we don't want to show our hand too early. I think it's worth just reminding people, Kevin, of the estimates around the size of the cannabis market in Canada. So anything from $7 billion to $10 billion beverages, anything from 20% to 30%.

So, if you take the low-end estimates of that, there's a potential over time for that market to be worth around $1.5 billion. So I think with our position and knowledge of the Canadian market and the great partner we have, we're well positioned to be on the playing field from day one to compete very effectively, and we know how to compete effectively in Canada.

Kevin Grundy -- Jefferies -- Analyst

Thank you for that. Just the quick follow-up, a point of clarification would be, it seems like you do not anticipate either further OpEx or elevated OpEx or for further investment into the JV in order to support the initial roll-out, is that how we should think about it at least for '19?

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Tracey, do you want to?

Tracey I. Joubert -- Chief Financial Officer

Yes, I would say to Fred's comments not significant. We went into this joint venture really having a look at the cash required and investment required, and we feel comfortable with the level of investment that we are going to make in the operating expenses that we can include, but they are not significant.

Kevin Grundy -- Jefferies -- Analyst

Thank you.

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Mark, it's not available until October probably of this year. So the impact on Q4 would I think be relatively small in 2020. Then you've got full year of revenue up against the full year of cost as well. So, I think we can give more detail once we get into the market place, and we can see what kind of consumer reaction we get.

Kevin Grundy -- Jefferies -- Analyst

Thank you, everyone. Good luck.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mark Hunter for any closing remarks.

Mark R. Hunter -- President and Chief Executive Officer

Thanks, Gary. Could I just thank everybody for their interest in the Molson Coors Brewing Company. Hopefully, we've laid out very clearly the significant progress we've made as a company and also given you a little sense of transparency against the opportunity areas that we continue to work on to further strengthen the performance of our business and our overall shareholder returns. So, I look forward to catching up with people on a one-to-one basis as per Mark's comments, and thanks again for your interest in Molson Coors.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 76 minutes

Call participants:

Mark Swartzberg -- Vice President of Investor Relations

Mark R. Hunter -- President and Chief Executive Officer

Tracey I. Joubert -- Chief Financial Officer

Andrea Teixeira -- J.P. Morgan -- Analyst

Gavin D.K. Hattersley -- President & CEO of Millercoors LLC

Dara Mohsenian -- Morgan Stanley -- Analyst

Judy E. Hong -- Goldman Sachs -- Analyst

Robert Ottenstein -- Evercore ISI -- Analyst

Bryan D. Spillane -- Bank of America Merrill Lynch -- Analyst

Simon Cox -- President and Chief Executive Officer of Molson Coors Europe

Lauren Lieberman -- Barclays -- Analyst

Amit Sharma -- BMO Capital Markets -- Analyst

Steve Powers -- Deutsche Bank -- Analyst

Sergey Yeskov -- President and Chief Executive Officer of Molson Coors International

Vivien Azer -- Cowen and Company -- Analyst

Laurent Grandet -- Guggenheim Securities -- Analyst

Frederic Landtmeters -- President and Chief Executive Officer of Molson Coors Canada

Kevin Grundy -- Jefferies -- Analyst

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