Pitcher This: Big getting bigger
10-10-2007
Two of the biggest names in brewing are getting together.
SABMiller, the global beer giant that owns America's Miller Brewing Co., and Molson Coors, which operates Coors Brewing Co., announced Tuesday they would combine their U.S. operations into a joint venture, MillerCoors. The new company would be the second-largest brewer in the United States, after Anheuser-Busch, with $6.6 billion in revenue off sales of 69 million barrels of beer.
So what's that mean for Joe Sixpack?
If you'll pardon the metaphor, I think it'll be a lot like pouring half a Coors Light into half a cup of Miller Lite; you won't really notice.
The new company will likely continue to brew and market all the brands customers are familiar with, including Coors, Coors Light, Miller Lite and Miller High Life.
And the profits will continue to go to the same places: the headquarters of the huge multinational firms that actually own those brands. SABMiller, an amalgamation of the original Miller and South African Breweries, is headquartered in London; MolsonCoors, the product of a merger between a Canadian Molson and the original Coors Brewing, has its headquarters in Denver.
The companies hope to save some money by teaming up on marketing, distribution and brewing operations.
For fans of full-flavored beer diversity, there doesn't seem to be much to toast here, at least on the surface. Swap the labels on either company's main offerings and one might not even notice. And that goes for the new company's main competitor, maker of Budweiser and Bud Light, too.
All three companies are fighting for a share of the same shrinking market for mass-produced beer. They've been losing ground to wine, liquor and craft beer from smaller, more creative brewers. Consumers, it seems, are getting bored with the same ol' pale lager that has been the staple of American brewing for decades.
But if a more profitable MillerCoors has more money to invest in developing and marketing new products, there's a chance it could mean more interesting stuff on the cooler shelves at your corner store.
Coors has recognized the appeal of craft beer and has been cashing in with its higher-quality Blue Moon line of wheat beers. Miller, meanwhile, has since 1988 owned Wisconsin-based Jacob Leinenkugel Brewing Co., which makes a number of craft beers including Sunset Wheat, available here.
And SABMiller has in its stable of brands a number of European brews such as Pilsner Urquell and Peroni that appeal to those with a more discriminating palate.
If the new company commits more resources to promoting these and other high-quality brands it could go a long way toward improving the diversity of beer for sale, and perhaps brew up some new profits in the process.