About Coors Brewing Company

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 30.5 million hectoliters (805 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 nearly 40% of the beer sold in that country. In the US, MCBC does business through MillerCoors, a joint venture with 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.

Operations

The MillerCoors joint venture, anticipated to take market share from US beer behemoth Anheuser-Busch, combined both companies' popular brands. 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. The company also has a UK subsidiary, Miller Coors Brewing Company (UK) Limited.

Molson Coors International (MCI) sells products in developing markets in Asia, continental Europe (excluding Central Europe, which is part of the Europe segment), Latin America (including South America), the Caribbean (excluding Puerto Rico, which is part of the US segment) and Australia.

Its core product portfolio includes the Carling, Coors Light, Molson Canadian, and Staropramen brands.

Geographic Reach

Denver-based MCBC sells its products worldwide. Canada is the brewer's largest market, accounting for more than 40% of sales; while the UK represents another 30%. The company has more than a dozen brewery/packaging plants in Europe, six in Canada, and one in Asia. 

Sales and Marketing

MCBC markets products through media advertising (television, radio, print), as well as tactical advertising (signs, banners, point-of-sale materials). The company spent $486.4 million on advertising in 2014, up from $458.5 million and $423.5 million in 2013 and 2012, respectively.

In the US, the company mostly distributes beer through a three-tier system consisting of manufacturers, distributors, and retailers. MillerCoors products are purchased and distributed to retail accounts through a national network of roughly 450 independent distributors. In Europe, MCBC may distribute through either a two-tier system (manufacturers and retailers) or a three-tier system, similar to the US.

In 2014, MCBC sold roughly 18% of its Canada segment beer volume on-premise, in bars and restaurants. The other 82% was sold off-premise, through convenience stores, grocery stores, liquor stores, and other retail outlets.

Financial Performance

MCBC has been enjoying revenue growth for most of the past few years as the world economy continues to strengthen. Revenue in 2014, however, dipped by 1% to $4.15 billion, mostly due to a 5% decline in sales-to-retailers in Canada, driven by the termination of its Molson Modelo joint venture, decline in the region's market, weak economic factors, and fierce promotional competition. US sales fell by 7% due to declines in premium light and economy products. 

Net income also tumbled by 9% to $514 million in part because of lower revenue, but mostly because the company incurred $124.4 million more in special charges related to restructuring activities and increased impairments of intangible assets during the year. In 2013, net income had jumped 28% thanks to cycling of financing and acquisition costs incurred in 2012 related to the purchase of StarBev, lower income taxes, and an increase in earnings from MCBC's European business.

Cash flow from operations increased for the fourth consecutive year, to $1.27 billion, primarily thanks to higher earnings before non-cash items, along with lower cash paid for pension contributions, interest, taxes, and restructuring.

Strategy

MCBC continues to follow a growth strategy that consists of building a stronger brand portfolio, delivering value-added innovation, growing the market share among its core brands, and growing its business in the above premium, craft and cider markets.

Supporting its innovation initiatives, in 2013, the beer maker invested £28 million in brewing technology at its brewery in Burton-on-Trent in the UK, bringing the total invested in that facility to £75 million. The additional funds would support brewing a large proportion of the 1.2 billion pints of beer brewed in Burton, including the Carling, Coors Light, and Cobra brands.

Moving more into premium products, the company in early 2015 began selling premium import brands owned by Heineken, including the Desperados, Dos Equis, Moretti, Sol, and Tecate brands.

Mergers and Acquisitions

In June 2012, MCBC acquired StarBev L.P. for €2.7 billion ($3.4 billion). Headquartered in Prague, StarBev operates nine breweries in Central and Eastern Europe and boasts a top three market share won through its more than 20 brands; the addition expands MCBC's portfolio of champion regional labels and furthers its presence in an increasingly thirsty market.

Company Background

In an effort to boost its top line, MCBC has looked beyond its core markets to growth markets around the world. Its share of the Canadian and UK market has remained increasingly robust, but luring US beer drinkers is challenging. In 2010, the company's MCI division 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 Vietnam and Russia, and entered Ukraine, Eastern Europe's second-largest beer market, through a joint venture with local brewer Obolon Company.

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Coors Brewing Company

17735 W 32nd Ave
Golden, CO 80401-1217
Phone: 1 (303) 279-6565
Fax: 1 (303) 277-2649

Stats

  • Employer Type: Public
  • Chief Marketing Officer: Andrew England
  • Manager, Chief Technology Officer: Ben Hall
  • Sr V Pres-gen Counsel: M C Turner

Major Office Locations

  • Golden, CO

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