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. Through its subsidiaries including major brewer MillerCoors, MCBC produces some 47 million hectoliters (over 1.2 billion US gallons) of beer a year. The beer maker's portfolio of brands is led by Molson Canadian, Miller Lite, and Coors Light. It dominates the Canadian market, accounting for more than 25% of the beer sold in the country, and has a leading position in the US as well. MCBC also has a significant worldwide presence, owning the UK's biggest selling beer, Carling, and the #2 Czech beer, Staropramen. MCBC operates as Molson Coors International (MCI) in developing markets.

Operations

As well as its core brands of Carling, Coors Light, Miller Lite, Molson Canadian, and Staropramen, Molson Coors Brewing Company (MCBC) also owns craft and specialist beer makers Blue Moon Brewing Company, Jacob Leinenkugel Brewing Company,  Creemore Springs, Cobra, and Doom Bar.

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.

Geographic Reach

Denver-based MCBC sells its products worldwide. The US is MCBC's largest market at around 33% of sales, followed by Canada at 25%

The company has more than a dozen brewery/packaging plants in the US, seven in Canada, 12 in Europe, six in Canada, and three in India.

Sales and Marketing

MCBC markets products through media advertising (television, radio, print), as well as tactical advertising (signs, banners, point-of-sale materials).

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 more than 400 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.

Craft and import brands in the US are marketed and sold through Tenth and Blake Beer Company.

MCBC's on-premise/off-premise mix (bought in a pub or restaurant versus a supermarket, liquor store, or other retail outlet) varies by country. In the US, around 85% of sales are off-premise; in Canada, 81%; and in Europe 60%.

Financial Performance

In fiscal 2016, MCBC's sales jumped 37% to $4.9 billion, largely due to the acquisition in October 2016 of the remaining 58% of MillerCoors it did not already own.

As the acquired business was essentially SABMiller's US operations, virtually all of MCBC's revenue growth in 2016 came from the US market, which rocketed from $94 million to $1.6 billion and became the company's largest market in the process. MCBC witnessed declines in Canada and the UK as customers consumed more off-premise beer due to the lower prices offered and a general decline in pub-going. The company grew its other international revenue by just under $20 million to $846 million.

Net income grew some 614%, or $1.7 billion, to $2.0 billion as a result of the acquisition. The increase came from the positive reevaluation of the company's existing stake in MillerCoors.

Besides this one-off benefit, the company was able to achieve lower cost of goods sold in the US while pushing up pricing. In Canada, the company made a net loss of $135.5 million (versus a gain of $277.2 million the previous year) due to brand revaluations, lower volumes sold, and unfavorable currency movements. In Europe, MCBC returned to profit, posting net income of $138 million after a $109 million loss the previous year. The improved performance was down to an increase in market share and the 'premiumization' of its product portfolio, i.e. increasing the value of its brands so they can be offered at higher price points.

Cash from operating activities climbed $411 million to $1.1 billion due to strong cash generation in the US due to the acquisition and a discretionary payment to its UK pension plan.

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.

The company is shaking up its brewery network to improve efficiency and supply chain flexibility. It closed two breweries in Europe in 2015 (Alton, UK; and Plovdiv, Bulgaria), and will close its Burton South, UK, brewery in 2017. Additionally, in 2016, MCBC sold its Vancouver brewery to make way for a more efficient and flexible brewery, due for construction over the next few years.

MCBC in 2015 agreed to buy the 58% of MillerCoors that it didn't own from SABMiller. The purchase was generated by the merger of AnheuserBusch InBev and SABMiller.

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 2015 MCBC agreed to pay $12 billion for SABMiller 58% stake in MillerCoors, the joint venture the companies formed in the US in 2008. Regulators required MillerCoors to be spun off for AB InBev's SABMiller acquisition to clear anti-trust laws. The acquisition makes MCBC the world's third-largest brewer. As well as the MillerCoors beer brands, it also brings distribution contracts for import brands Peroni, Grolsch, and Pilsner Urquel.

Also in 2015 MCBC acquired Mount Shivalik Breweries in India. As part of the transaction, it acquired Mount Shivalik's entire brand portfolio, including the leading strong beer brand, Thunderbolt, and assumes direct control over brewing operations in Haryana and Punjab, as well as distribution for Thunderbolt in Bihar. MSBL is a significant player in the strong beer segment in India.

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
  • Chb: Peter H Coors
  • Director Conditioning: Darrell Miller
  • Chairman: Eric Molson
  • Employees: 2,000

Major Office Locations

  • Golden, CO

Other Locations

  • Benton, AR
  • Denver, CO
  • Longmont, CO
  • Monte Vista, CO
  • Wheat Ridge, CO
  • Washington, DC
  • Burley, ID
  • Gurnee, IL
  • Huntley, MT
  • Edison, NJ
  • Cincinnati, OH
  • Memphis, TN
  • Elkton, VA
  • Worland, WY
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