Molson Coors Brewing Company (MCBC) drinks with the big boys: the company is one the world's largest beer makers by volume. Operating through its subsidiaries, MCBC produces some 19 million hectoliters (502 million US gallons) of beer a year. The beer maker's portfolio of brands, led by Molson Canadian and Coors Light, dominates the Canadian market, accounting for 40% of the beer sold in that country. In the US, MCBC does business through MillerCoors, a joint venture 58%-owned by SABMiller. MillerCoors, the second-largest US brewer by volume, markets Coors, Coors Light, and Molson brands. In addition to Canada and the US, MCBC operates in the UK, and as Molson Coors International (MCI), in developing markets.
Despite a significant decline in sales since 2008, the company's year-over-year earnings have soared. Its performance reflects the formation of MillerCoors. The joint venture, anticipated to take market share from US beer behemoth Anheuser-Busch, combined both company's popular brands. As a result, profits have grown from cost saving initiatives largely attributable to centralizing the partners' US marketing, sales, and distribution operations. MillerCoors, which also handles beer sales in Puerto Rico, boasts more than half a dozen breweries including Molson Coors' plant in Golden, Colorado, the world's largest single-site brewery.
The combination of MillerCoors added several new business arrangements, too. The venture brews, packages and ships beer for the Pabst Brewing Company under contract. A deal with Miller Brewing Company (a US subsidiary of SABMiller) enables MCBS to brew, market, and sell Miller brands abroad, as well.
In an effort to buoy its top line, MCBC tinkered with the pricing of its stronger brands during 2010. Its share of the Canadian and UK market has remained increasingly robust; however, luring US beer drinkers remains challenging, albeit many have embraced the Coors Light, Blue Moon, and Miller Lite brands. Internationally, MCI moved deeper into China, through a venture with Si'hai Brewing Company, as well as Spain, with Mahou San Miguel for Carling beer. MCI also launched Coors Light in Russia and Vietnam, and entered Ukraine, Eastern Europe's second-largest beer market, through a joint venture with local brewer Obolon Company.
Going forward, MCBC is distributing GRUPO MODELO's brands in the UK and Japan. The move builds upon a joint venture, Modelo Molson Imports, to import, distribute, and market the Corona and Modelo beer brands in Canada. Other longstanding agreements are held with Heineken N.V. to import, market, and sell Heineken products in Canada, with Asahi to brew the Japanese beer for the US market, and with Foster's to produce the Australian beer abroad.
Some ventures, however, have required an extraordinary investment. The company extended a $35 million rescue package to its troubled joint venture in India in mid-2011. MCBC holds a controlling stake in Cobra India, renamed Molson Coors Cobra India, with the Billimoria family (founders of Cobra Beer). Cobra Beer is stocked in more than 6,000 restaurants and in all major supermarkets in the UK. To further strengthen the business, MCBC and Cobra in 2011 established a joint venture to brew and distribute Cobra Beer in South Asia.
Amid MCBC's transformation, the company has preserved its family ties. Members of the Coors and Molson family hold senior leadership positions. The Coors family owns about 12% of the company through the Adolph Coors Jr. Trust.