SABMiller and Coors merge US business

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SABMiller and Coors merge US business

• Published October 9, 2007
• Financial Times
• By Jenny Wiggins
• Presented by Ashley DiMaria
• Mike Giordano
• Juliann Whitebread

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History of SABMiller

• Founded in South Africa in 1895, the operations
  of South African Breweries (SAB) were mainly
  limited to southern Africa until 1990, where it
  had established a dominant position in the
  market.
• After listing on the London Stock Exchange in
  1999 to raise capital for acquisitions, the group
  purchased the Miller Brewing Company in North
  America from Altria Inc, changing its name to
  SABMiller.
• Following this, the groups next major
  acquisition was of a major interest in Bavaria
  S.A. South Americas second largest brewer and
  owner of the Aguila and Club Colombia brands in
  2003.
• In the same year, SABMiller acquired a 29,6
  stake in Harbin Brewery, Chinas oldest brewer,
  preparing the group to benefit from growth of the
  beer category in developing markets.

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Facts about SABMiller

• One of the worlds largest brewers with brewing
  interests or distribution agreements in over 60
  countries across six continents.
• The groups brands include premium international
  beers such as Miller Genuine Draft, Peroni Nastro
  Azzurro and Pilsner Urquell, as well as an
  exceptional range of market leading local brands.
• Outside the USA, SABMiller plc is also one of the
  largest bottlers of Coca-Cola products in the
  world.

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SABMiller Brands

• Over 150 brands including
• -Peroni
• -Miller Lite
• -Pilsner Urquell
• -Milwaukee's Best
• -Miller Chill
• -Icehouse

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Global Market

• Africa and Asia
• -Brewing operations in Africa span 31 countries.
• -In China, the groups national brand in that
  country, Snow, is produced in partnership with
  China Resources Enterprise Limited, is the
  leading brand by volume in China.
• -SABMiller is the second-largest brewer in India
  and has joint ventures in Vietnam and Australia.
• Europe
• -Operations are mostly centered in the fast
  developing consumer markets in Eastern-Europe
  (Hungary, Romania, Poland, Czech Republic and
  Russia)
• -There are also operations in Italy, France, UK
  and Germany where it imports its international
  premium brands.
• Latin America
• -They were the first international brewer to
  enter Central America.
• -They now operations into six countries,
  including Colombia, El Salvador, Ecuador, Panama
  and Peru.
• North America
• -The USA is the worlds most profitable beer
  market
• - SABMillers local subsidiary in the region,
  Miller Brewing Company, headquartered in
  Milwaukee, Wisconsin, is the countrys second
  largest brewer.
• -Miller also produces beer under license in
  Canada and distributes in Mexico.

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History of Molson Coors

• Founded in 1847 by fourteen year old Aldolph
  Coors in Barmen, Prussia.
• Adolph and Jacob Schueler open The Golden Brewery
  in 1873 in Colorado. Adolph becomes sole owner in
  1880
• In 1937 the simple slogan, Brewed with Pure
  Rocky Mountain Spring Water is first heard, and
  will serve the company well for the next 50
  years.
• 1978 Coors introduces the popular Coors Light
  brand-dubbed the Silver Bullet-which becomes one
  of the country's best-selling beers.

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Facts about Molson Coors

• Molson Coors is now available in all 50 states.
• It is the third largest brewer in the U.S.
• During the 90s, Molson Coors becomes the
  nation's third-largest brewer and experiences the
  fastest volume growth rate in the industry.

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Coors brands

• 15 brands including
• -Coors Light
• -Molson Canadian
• -Coors
• -Killian's Irish Red
• -Keystone
• -Blue Moon

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History of Anheuser-Busch

• Eberhard Anheuser acquired the Bavarian brewery
  in 1860 and renamed it E. Anheuser Co.
• In 1864, his son-in-law, Adolphus Busch, joined
  the company that would later become
  Anheuser-Busch.
• Budweiser introduced in 1876.
• SeaWorld purchased in 1989.

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Facts about Anheuser-Busch

• Today, Anheuser-Busch produces the two
  best-selling beers in the world, Budweiser and
  Bud Light.
• Operates 12 breweries in the United States and
  has operations around the globe.
• They are currently the market leader in beer
  sales.

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Anheuser-Busch Brands

• Over 60 brands including
• -Budweiser
• -Bud Select
• -Michelob ULTRA
• -Grolsch Amber Ale
• -Busch
• -Natural Ice
• -Amber Bock

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Article Summary

• Problem
• -Although SABMiller is the second largest brewer
  in the US after Anheuser-Busch, it has found
  making money there more difficult than expected.
• -Entry coincided with consumer shift to wine and
  spirits purchases.
• Solution
• -SAMiller and Molson Coors to merge to create
  rival market with Anheuser-Busch ? MillerCoors
• - The joint venture will have eight breweries in
  the US.

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International Marketing Implications

• Combination of complementary assets will create a
  stronger, more competitive U.S. brewer with an
  enhanced brand portfolio.
• Greater scale and resources will allow additional
  investment in brands, product innovation and
  sales execution.
• Consumers and retailers will benefit from greater
  choice and access to brands.
• Distributors will benefit from a superior core
  brand portfolio, simplified systems and lower
  operating costs.
• Before the merger SABMiller had 18 of the
  market, Molson Coors had 11 of the market and
  Anheuser-Busch has about 50 of the market. With
  the partnership MillerCoors will have 30 of the
  market, helping them to better compete against
  the leader.

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International Marketing Implications Cont

• SABMiller and Molson Coors expect that the
  enhanced brand portfolio, scale and combined
  management strength of the joint venture will
  allow it to better compete in the highly
  competitive and changing U.S marketplace and thus
  improve the standalone operational and financial
  performance of both Miller and Molson Coors
  through
• Building a Stronger Brand Portfolio and Giving
  Consumers More Choice
• Capturing Synergies and Improving Productivity
• Creating a More Effective Competitor
• Improving the Route to Market and Benefiting
  Distributors and Retailers
• Optimizing Organizational Strength

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International Marketing Implications
Cont

• Ch. 9 Global Strategic Partnerships
• Strategic Alliance A partnership among two or
  more firms created to minimize risk while
  maximizing leverage in the marketplace.
• Collaborative Agreements Linkages between
  companies from different countries for the
  purpose of pursuing common goals.

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• Pete Molson Coors, Vice Chairman of Molson Molson
  Coors, said, This transaction is driven by the
  profound changes in the U.S. alcohol beverage
  industry that are confronting both of our
  companies with new challenges. Consumers are
  broadening their tastes and are increasingly
  looking for greater choice and differentiation
  wine and spirits companies are encroaching on
  traditional beer occasions, and global beer
  importers and craft brewers are both taking a
  larger share of volume and profit
  growth. Creating a stronger U.S. brewer will help
  us meet these challenges, compete more
  effectively and provide U.S. consumers with more
  choice, greater product availability and
  increased innovation.  The Molson and Molson
  Coors families are firmly in support of this
  strategic transaction.