strategic-management

222 AMIT J. SHAH
According to Molson, “The realization of this vision entails delivering profitable growth
and sustainable long-term shareholder value. This vision is being aligned with the corporate
direction of Molson Coors, the company resulting from the merger of equals between
two breweries both with rich family and social heritage in North America.”
Molson Coors
Coors, along with other breweries, began to experiment with beer production with regard to
packaging, sizes, and even types of beer produced. Before 1959, kegs and bottles were the
primary means of selling beer. Then, Coors introduced the first all-aluminum two-piece
beverage can along with a recycling campaign that offered one penny for every can returned
to the brewery. Because the introduction of the can helped increase demand for Coors’ beer,
the third-generation owner, Bill Coors, decided to develop additional new technologies to
use in the brewing industry as well as to serve international markets in the 1970s.
Coors introduced the Coors Light brand, also known as the Silver Bullet, in 1978.
Today, Coors’ products are available in about 30 international markets (Molson Coors,
Annual Report, 2008).
The merger between Adolph Coors Brewing Co. and Molson Brewing was
completed February 9, 2005. The A and B shares of stock for the firm are available on the
New York Stock Exchange and Toronto Stock Exchange under the ticker symbol TAP.
Molson Coors Brewing Company’s offers some of the world’s most popular beers
with a well-diversified product portfolio that includes nearly 40 distinct beer brands. Its
strategic brands include the following:
Coors Light—#7, Global Carling C2—United Kingdom Molson Dry—Canada
Blue Moon—United States Molson Canadian—Canada Rickard’s Red—Canada
Keystone Lt.—United States Molson Ex—Canada Creemore Springs—Canada
Carling—United Kingdom
MillerCoors
The merger between Molson and Adolph Coors was just the beginning of strategic
alliances for this brewing giant. Molson Coors and SABMiller plc combined the U.S. and
Puerto Rico operations of their respective subsidiaries, Coors Brewing Company and
Miller Brewing Company, in the MillerCoors joint venture, effective July 1, 2008
(Molson Coors, Annual Report, 2009). The two companies expect that the enhanced
brand portfolio, scale, and combined management strength of the joint venture will allow
their businesses to compete more forcefully in the aggressive and rapidly changing U.S.
marketplace.
For the first quarter of 2009, Molson Coors reported that profits rose to $75.7 million,
but sales fell 59 percent to $559 million. The weakest product for the company continued to
be Miller Lite, but Miller Genuine Draft recorded its first volume growth in ten years.
MillerCoors’ volume of beer sold worldwide slipped 3.2 percent in the threemonth
period ending in June 2009, including a drop of more than 12 percent in Britain,
where Molson Coors sells market-leading Carling. But price increases helped buffer the
drop, as revenue came in ahead of analyst expectations. Profits for the joint venture rose
75 percent to $304.9 million in the quarter, which also helped Molson Coors’ bottom
line.
Consumers are limiting their spending at bars and restaurants and trading down to
less expensive drinks in stores, reported MillerCoors, the joint venture Molson Coors
started last summer with SABMiller’s U.S. unit. For the second quarter of 2009, the joint
company saw double-digit growth in Keystone Light and low single-digit growth in Miller
High Life, both less expensive brands.
Molson and Grupo Modelo established a 50/50 joint venture, Modelo Molson
Imports, L.P., to import, distribute, and market the Modelo beer brand portfolio across all
Canadian provinces and territories. Also, on January 13, 2006, Molson Coors sold its 68
percent of equity interest in Kaiser Brasil to FEMSA Cerveza (Molson Coors, Annual
Report, 2008).