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.

Geographic Reach

Canada is Denver-based Molson Coors Brewing Company's largest market, accounting for more than 40% of sales. The UK is another important market for the company, representing about 30%.

Operations

The MillerCoors joint venture, anticipated to take market share from US beer behemoth Anheuser-Busch, combined both company's popular brands. 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.

Financial Performance

In 2013 the beer company reported sales of $4.2 billion, up 7% from $3.9 billion in 2012, on a 20% increase in volume. (Sales rose 11% in the previous annual comparison.) The increase was primarily driven by higher revenue in the US and Central Europe, higher volumes the UK, and price increases. Also, the 2012 acquisition of Central European brewer StarBev helped to boost sales.

Net income was up 28% over the same period, to $567.3 million, due 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, offset by special charges, including restructuring charges incurred in 2013. Cash flow from operations increased for the third consecutive year, to $1.17 billion, primarily due to higher net income and the addition of operations in Central Europe.

Strategy

In an effort to boost its top line, MCBC is looking 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. To this end, 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 has 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.

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 will support brewing a large proportion of the 1.2 billion pints of beer brewed in Burton, including the Carling, Coors Light, and Cobra brands. MCBC, meanwhile, is distributing GRUPO MODELO's brands in the UK and Japan. The arrangement builds upon a joint venture, Modelo Molson Imports, to import, distribute, and market the Corona and Modelo beer brands in Canada. Other longstanding deals 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. 

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.

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COORS BREWING COMPANY


17735 W 32nd Ave
Golden, CO 80401-1217
Phone: 1 (303) 279-6565
Fax: 1 (303) 2772649

STATS


  • Employer Type: Unknown
  • Chb: Peter Coors
  • Cio Cto Vp It: Jerry Iwanski
  • Vp Hr: Robert Johnson

Major Office Locations

  • Golden, CO
  • Golden, CO

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