Article That Talks About How Big Beer Is Dealing With Craft Beer

Posted by ed | News | Posted on May 8th, 2014

May 2, 2014, 3:09 pm

Pete Coors, big beer industry continues to grapple with craft beers

Arguably the high priest of Colorado Beer, Pete is in an interesting position these days as chair of one of the biggest brewing companies  in the world at a time that the consumer market appears to be changing.

Pete Coors, chair of the Molson Coors Brewing Company and Chairman of MillerCoors, sat down with the Denver Post recently and talked about the ever-changing beer landscape. .

Pete Coors, chair of the Molson Coors Brewing Company and Chairman of , sat down with the Denver Post recently and talked about the ever-changing beer landscape. (Photo by The Denver Post)

Molson Coors is the world’s seventh largest brewer by volume. Even though the big breweries continue to hold the largest part of the beer market, there are signs of trouble.

Fourth quarter earnings reported by MillerCoors last month showed  domestic sales to retailers declined nearly 2 percent for the quarter and domestic sales to wholesalers decreased by 2.2 percent.

Consumer surveys have said that people appear to be growing tired of light premium beer.

Coors, the 67-year-old great-grandson of brewing entrepreneur Adolph Coors, said his company continues to do whatever it can to keep up. As the craft beer industry’s reach is steadily growing into the traditional beer turf, the big brewers are getting strategic.

 

“Basically the biggest trouble we have is on-premise sales,” he said. “We have a lot of bar owners who are enamored with craft beers. They are beginning to take off the premium light handles and putting bottles behind the bar instead and replacing the handles with craft beer handles. We lose 50 percent of our volume when that happens.”

The company is trying to compel bar owners to keep their beers on tap by impressing them with facts.

“We have done research that shows it’s not in the economic benefit for a bar to do that,” he said. “Having a premium light brand, whether it’s Coors, Miller or Bud on tap actually improves the economics of their business. People stay in their seats an average of 18 minutes longer when they have a light premium beer on tap. That means they are spending more money, leaving bigger tips. We have a little algorithm and an app that we give to our distributors to evaluate and analyze these businesses and bars.”

Coors, also the chair of the Denver 2016 host committee trying to win a bid for the Republican National Convention, sat down with The Denver Post editorial board recently to discuss the convention but also talked about beer.

Pete Coors, seen here with his son David, in 2012. They accompanied a vintage 1940s-era delivery truck on a cross-country promotional trip to revive the Coors Banquet brand. (Photo by Dick Kreck).

Pete Coors, seen here with his son David, in 2012. They accompanied a vintage 1940s-era delivery truck on a cross-country promotional trip to revive the brand. (Photo by Dick Kreck).

Coors told The Post that Blue Moon remains the No. 1 selling “craft beer” in the country — a Belgian white introduced in 1995. Some people would reject that term because Coors does not fit the definition of craft brewer from the Brewers Association, the trade group for independent craft brewers.

Coors said to continue to be fresh, the company is looking at developing more new beers, looking at the possibility of acquiring more breweries and even pushing its new cider brands. He mentioned the 2009 purchase of Terrapin Beer Co. in Georgia as one experiment.

“We know a lot about brewing crafty beers and we are looking at new things all the time,” he said, adding that Colorado Native and Batch 19 have been popular additions. “We have a whole portfolio. Anheuser-Busch has a huge portfolio. They have acquired Goose Island and others. We bought a craft brewery in Georgia, Terrapin. We are a minority interest, which isn’t working out the best. So we are learning about that. And we have a growing cider brand.”

He has enjoyed watching the growth of craft brewing and even remarked that when John Hickenlooper was building up the Wynkoop Brewing in lower downtown Denver, that he used to bring him hops,  barley and bottles.

“They all want to grow, but the more they grow the less crafty they are,” he said. “They are getting fairly large and they are getting into each other’s space. They are having a hard time defining themselves as craft brewers because of their size.”

Coors said he was proud when his brewery a few weeks ago won major awards at the World Beer Cup, an occasion that drew some boos from the Denver audience.

Coors Brewing Company and MillerCoors head brewmaster Dr. David Ryder were recognized as the champion brewery and brewmaster among large brewing companies. Seven MillerCoors beers also won awards at the competition.

Coors said he is baffled about trends that show the more expensive craft beer market growing by about 7 percent, the light premium beer market staying flat and the economy beer market with brands such as Pabst Blue Ribbon and Keystone dropping by 7 percent or even into double figures.

“In this economy that is difficult to understand,” Coors said. “But people are staying at home now, not buying cars or houses. They have money to spend. They want to spend it on something that they think has more value. … You talk about the millennials. The world is very different.”

Not for Pete Coors, who said he still drinks the same beer he has consumed for decades.

“I am a Coors Banquet drinker,” he said. “I grew up on it and just can’t get myself to change.”

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