Molson Coors invest in Niche Beers


The brewing venture between SABMiller and Molson Coors in the US, MillerCoors, is investing heavily in its new craft and import beer business as it anticipates niche beers will continue to outpace mainstream brands in the next few years.

MillerCoors is trialling its standalone craft and import business, Tenth & Blake, in half a dozen areas of the US as it seeks to tap into strong consumer demand for high-end, smaller-scale beers in the country.

Distributors, at least, have taken well to the new operation, according to the brewer. "The early reception has been really terrific," MillerCoors' president of sales and distribution, Ed McBrien, told analysts in London yesterday (30 November).

Craft beers have strongly outperformed established brands at both MillerCoors and Anheuser-Busch InBev in the economic downturn and the Coors Light brewer expects the trend to continue. It predicts that craft beer volumes will increase in mid-single digits annually in the US over the next three years, while the overall beer market will only expand by between 0.5% and 1%.

McBrien told analysts that MillerCoors is "deeply committed" to Tenth & Blake, which counts Peroni Nastro Azzurro and Blue Moon as flagship brands. "We are investing at a disproportionate rate behind our above-premium brands, our craft and import brands," he said.

"Tenth & Blake will have a fully dedicated field organisation responsible for selling those brands and we've not operated with a model like that in the past. [We've got] people whose only objective is to grow brands like Peroni at a disporoptionate rate," he said.

Demand for imported beers in the US fell sharply in 2009, but the category has since returned to growth and is set to slightly outperform the market up to 2013.

MillerCoors saw beer volume sales fall for the three months to the end of September by 2.7% to to 17.9m barrels compared to the same period of 2009 and by 3.76% on Q3 2008. Profits were boosted by beer price rises and cost savings.