MillerCoors is proof that beer can make old foes new friends. Long-time rivals, UK-based SABMiller and US-based Molson Coors put aside their differences to merge their operations in the US and Puerto Rico in a joint venture, MilllerCoors. The #2 brewer in the US operates eight breweries and enjoys almost 30% of the domestic beer market. Its flagship brews are sold under the Coors Light and Miller Lite labels and import brews under Peroni and Molson Canadian. A division, the Tenth and Blake Beer Company, offers craft and import brews, such as Blue Moon, Foster's, and many others. MillerCoors also makes Sparks, a line of brand malt-based beverages. The company is 58%-owned by SABMiller with Molson Coors holding 42%.
Chicago-based MillerCoors operates eight major breweries in the US, as well as the Leinenkugel's craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee and the Blue Moon Brewing Company at Coors Field in Denver, Colorado. The breweries are located n California, Georgia, North Carolina, Ohio, Texas, and Virginia.
Sales and Marketing
MillerCoors makes, markets and sells beer in the US and Puerto Rico. Major brands include Coors Light, Miller Lite, Miller High Life, Keystone Light, Blue Moon, Leinenkugel's, Coors Banquet, and Miller Genuine Draft. Its beer is sold to distributors for resale to retail stores. To spur sales in its economy segment, Miller High Life and Keystone Light resumed their national TV advertising campaigns in spring 2014, while Keystone Light renewed an agreement to partner with the FLW Walmart Bass Fishing Tour Series in March 2014. Miller Lite sponsored the South by Southwest Conference in Austin, Texas in March 2014 and will partner with celebrity chef Guy Fieri in the summer.
The joint venture was formed to boost market share and spur stagnant sales through a larger portfolio of brands, as well as improve profits through cost savings from combining production, distribution, and marketing. The combined operation was also positioned as a more formidable competitor to brewing giant Anheuser-Busch, and to a lesser extent local and regional brands, than either SABMiller or Molson Coors could be on their own in the US. (The merger did not include Molson Coors business in Canada, or SABMiller's international business.)
The American alcohol market, however, is rapidly changing for large beer companies with increasing competition coming from wine, spirits, and craft beers and imports. In response, MillerCoors is continuing to reorient its portfolio to include a more diverse range of faster-growing, higher-margin premium brands, such as Blue Moon, Peroni, and Leinenkugel's. In fiscal 2013 successful product launches included Redd's Apple Ale, and the nationwide expansion of Leinenkugel's Summer Shandy. As Americans become more sophisticated consumers of beer, sales of the company's core brands -- Coors Light and Miller Lite -- are declining as craft beer sales rise.
MillerCoors reported that underlying net income grew 5.5% in 2013 versus 2012, to $1.29 billion, driven by 30% profit growth in the fourth quarter. Total net sales increased by half a percent in 2013 versus 2012, to $7.8 billion. Driving sales in 2013 were premium brews, including Blue Moon, Leinenkugel's, Batch 19, and the launch of Redd's Apple Ale. In 2013, Coors Light sales declined by low-single digits, while Miller Lite's sales fell by high-single digits. Coors Banquet sales grew by high-single digits.
Mergers and Acquisitions
In November 2012, Foster's sold its 49.9% stake in Foster's USA LLC to MillerCoors LLC. As a result, Foster's LLC is now wholly owned by MillerCoors.