Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
ABOUT MOLSON
Molson Coors Brewing Company (Molson) is a publically traded company (NYSE: TAP, TSX: TPX.B)
formed through the merger of Molson Brewery Canada and Coors Brewing Company of Colorado (Coors)
in 2005. Molsons operating segments include Canada, the United States, Europe and Molson Coors
International (MCI). An industry leader in the global beer market, the companys portfolio contains over
100 beer brands internationally. As the worlds seventh largest brewer, Molson has 33 breweries across
50 countries, and operates offices in Canada, United States, United Kingdom, Central Europe, and Asia.
In 1786, John Molson, Molsons founding father, established his first brewery in Montreal - one of the
oldest North American breweries still standing today. By 1800, Molson became the first brewery in
Canada to bottle its own beers by hand. The idea of bottling in glass packaging introduced the concept
of bottle deposits and re-uses to the industry, a practice still seen in Canada. Subsequent to John
Molsons passing in 1836, the company and brand continued to prosper. From the implementation of
a refrigeration system in 1890 that allowed Molson to brew its beers year round, to delivering its first
beer via truck in 1910 Molsons success continued, leading to a number of great expansions. Through
purchasing Sicks Capilano Brewery in 1958, merging with Carling OKeefe brewery in 1989, to merging
with Coors in 2005 Molson had then solidified itself as one of the largest breweries in the world.
By 2004, Molson and Coors had already been in venture together as two independent entities. Molson
facilitated the brewing, sales and distribution of Coors beverages in Canada, and Coors facilitated the
sales and distribution of Molsons beers in the United States. Faced with rising competition in the
beer industry, the two companies ultimately merged to form Molson Coors (Molson), with the goal
of developing a strong business able to sustain long-term growth against even larger players in the
market. Preserving the visions of the two family-established breweries, Molson continues to bring
diverse and innovative beers of the highest quality to dedicated drinkers around the world.
1
CORE VALUES
Molsons ambition is to become one of the top brewers globally, delivering extraordinary brands that
captivate beer drinkers around the world. Molson is passionate about driving results and doing so the
right way by taking smart risks and working as a team. In order to continue progress, advancement,
and the development of Molsons presence in the beer industry, the company is constantly building on
its competitive advantage. By diversifying its brands to meet a wide range of consumers needs, Molson
seeks to create value for its customers, which ultimately drives financial success.
Molson has five core values that embody its brew and represent the company:
Excellence: Molson commits to efforts that are keys to winning, and works hard
to outperform its competitors in all manners. Focusing on the details that truly make
a difference in beer, Molson strives to deliver unique and flavourful beverages. To
surprisedrinkers with new achievements, Molson always pushes its limits to bring better
beers, even after 225 years of brewing.
Passion: Molson is a champion of great beer and seeks to share its passion. Sharing
the thirst for beer with its drinkers, Molson looks to offer the best beverages, at the best
moments, to the best people.
Integrity and Respect: Molson holds to heart the Golden Rule: treat everyone as
we expect to be treated. Having strong moral principles, Molson believes that being honest,
ethical, and open is the foundation for building lasting relationships with business partners
and colleagues within the company. Furthermore, respecting its customers builds loyalty.
Creativity: Molson holds a portfolio of over 100 beer brands internationally covering
a multitude of diverse taste palettes. Molson supports and values the importance
of discovering, innovating, and cultivating new ideas to keep the company sharp and
competitive. Being bold and distinctive, Molson consistently aims to challenge the norm in
the industry to bring to drinkers a renowned Molson beer experience.
Quality: Molson is devoted to delighting drinkers with high quality beers. Using sensible
procedures and effective technologies for quality control, Molson ensures all its beers are
superior. The company believes that high quality product stems from high quality people. As
such, Molson attracts talent who strive to deliver excellence in all areas.
SOURCES OF DIFFERENTIATION
In the British Columbian market, Molson is ambitious in further differentiating its beers
from local competitors through emphasizing two main themes in their products: quality
and locality.
Quality
Locality
Molson has a large brewery located on Burrard Street in Vancouver, British Columbia,
and many of the renowned beers consumed on the West coast are brewed in that
very location to satisfy the thirst and demand for Molson products.
Manufacturing beers locally provides an advantage as it is a great selling point for
marketing the Molson brand. In the past, Molson had pursued a specific point-ofsale marketing technique, labeling their beer bottles with an XX km away label
indicating the distance (in kilometers) that specific beer is from the Burrard brewery
where it was initially created. The further the beer bottle is from the brewery, the
greater the value of XX.
However, most of Molsons marketing efforts are focused on national branding (see
Appendix for examples). While this improves international exposure and strengthens
the Canadian flagship brands, Molson is hoping to improve local-based marketing.
Molson Canadian:
Coors Light:
Rickards:
TASTES BY BRAND
To suit drinkers of all types, Molson offers dozens of brands of beers worldwide. While Molson
recognizes that taste is crucial to existing beer drinkers, taste may also be a possible deterring factor to
potential beer drinkers. To increase enjoyment for existing drinkers and remove barriers for potential
drinkers, Molson has developed a Beer Taste Discovery System. This system categorizes the vast
majority of beers on the market, assisting customers in learning more about the style and tastes of
Molson beers, and to discover what they like.
Taste Category
Style
Taste Experience
Flavoured and
refreshing
Flavoured
lagers
Flavoured light
lagers
Lighter bodied,
Slightly
tangy, or mild
sweetness
Straw to gold
Lighter and
refreshing
Light lagers
Light ales
Some lagers
Lighter bodied,
low malt,
sweetness,
bitterness, or
aftertaste
Straw to gold
Bright and
balanced
Gold to copper
Domestic
Light to
medium
lagers
bodied, crisp
Imported lagers
finish with a
Some Pilsners
hop, bitterness,
and malt
sweetness
Ales
Dark lagers
Colour
Medium body
Blonde to
and sweetness,
amber, often
low
hazy
Amber to dark
brown
BEER INDUSTRY
Beer is a $5.7 billion dollar industry in Canada, and experienced an aggregate growth rate of
1.8% from 2010-2015. The industry is dominated by several top players, but the market share
of such players has been in decline in recent years, primarily due to the increasing popularity
of craft breweries.
The two big players in the Canadian market are Molson and Anheuser-Busch InBev (AB
InBev) with 33.3% and 41.5% market share respectively. Each of these corporations essentially
act as umbrella companies, holding many different beer brands in their portfolios. The main
brands under Molson are Molson Canadian, Coors Light and Rickards. The AB InBev portfolio
most notably includes Budweiser, Corona and Kokanee (which has a brewery in Creston, BC).
Molson Brands
AB InBev Brands
Increasingly, consumers are moving towards purchasing beer products they perceive to be
of higher quality, and have shown a higher willingness to pay for the improved quality. This
is leading to an increasing value of the beer market as a whole. Sales volume is anticipated
to remain fairly static in the beer industry, although there are subcategories of growth. For
example, demand for craft beer has skyrocketed in the urban areas of British Columbia.
BC Market Share
39%
26%
21%
13%
Market Segment
Brands
Premium
Molson Canadian, Coors Light, Budweiser, Kokanee, Pilsner
Value
Keystone, Extra Old Stock, Old Milwaukee, Lucky Lager, Colt 45, Black Label
Above Premium Domestic
Craft beer, Rickards, Sleemans
Above Premium Imports
Heineken, Coors, MGD, Corona, Stella Artois, Becks
Despite the rise of craft beers, no single craft brewery is large enough to be an individual
concern to any major player. However, their collective power poses a threat. Since 2013,
30 new craft breweries have been established in BC alone. The expected total number of
craft brewers in BC will rise to nearly 100 by the end of 2015. For comparison, there are
approximately 60 craft brewers in the province of Quebec and 50 in the province of Ontario
(who have double and triple the population of BC respectively).
7
Consumers accessibility to large international brands further increases competition in the craft beer
market. In 2012, legislation lifting restrictions on interprovincial transportation and distribution of
alcoholic beverages took effect, allowing craft brewers to transport its beers outside provincial regions.
The elimination of geographic limitations gives way to both craft beer imports and the expansion of BC
craft beers into other provinces.
The rise of small producers can be partially attributed to the growing perception in BC that craft beers
are fresher and of higher quality due to their local production. Further appeal of craft beer lies in the
more unique range of available flavours, some a significant departure from the traditional beer taste.
Craft breweries are able to create many experimental flavours, offering consumers new and exciting
options. For this reason, flavoured lagers have been seeing a rise in sales.
BARRIERS TO CONSIDER
LEGISLATION
There are high barriers to market entry due to strict liquor regulations
in British Columbia. These regulations include prohibitions on the
public sale of alcohol other than in licensed liquor stores, and on the
consumption of alcohol outside of a private residence or licensed
premises. In addition, licensing regulations often require craft breweries
to meet certain sales volume and production scale levels. Provincial
governments across Canada, however, tend to support craft breweries
and allocate shelf space for craft breweries in licensed liquor stores. In
fact, the BC government made a pledge in 2014 to promote craft beer
tourism.
GOVERNMENT SUBSIDIES
As added support, the BC provincial government provides subsidization
to craft brewers in the form of tax breaks. It is unlikely that craft
brewers could survive on uniqueness of flavour alone and would likely
be priced out of the market by the larger breweries without these tax
breaks.
In 2012, the BC provincial government implemented a graded tax
structure, meaning that smaller breweries are subject to increasing tax
rates on an incremental scale as their volume increases. The tax rates
increases for every 5,000 hectolitres (500,000 litres) sold above 160,000
hectolitres up to 300,000 hectolitres (at which point the brewer would
be in the highest tax bracket). As a frame of reference, Molson produced
over 30 million hectolitres in 2014.
Note that it is not uncommon for larger brewers such as Molson, AB
inBev and Sleemans, to jointly lobby the government for their mutual
benefit.
9
CONSUMER DEMOGRAPHICS
Men consume 59.5% of total beer volume and consumers between 19 and 30 years old
account for 19.9% of the total market (note that the legal drinking age in BC in 19 years
old). Below is a chart showing the population breakdown for Vancouver, Victoria, BC and
Canada as a whole in the target demographic segment, as well as a segment above and
below. Consider the fact that those in the 10-19 year old segment are just beginning to
come of legal age and will become part of the key target market quite soon.
As metropolitan areas, Vancouver and Victoria are respectively the 3rd and 15th most
populated in the country. The recent dramatic rise in craft beer labels in the industry has
been most prevalent in these larger urban centres. In British Columbia, this phenomenon
has been particularly visible; Vancouver and Victoria have come to be perceived as Craft
Beer hubs.
jhgjh
Canada
British Columbia
Vancouver
Victoria
Total Population
33,476,688
4,400,057
2,313,325
344,615
% Age 10-19
12.24
11.68
11.67
10.11
% Age 20-29
13.02
12.92
14.24
13.67
% Age 30-39
12.95
12.67
12.89
12.19
10
THE CHALLENGE
With goals of growing market share and brand recognition, what are the key strategies that Molson
should utilize in managing the rise of craft beer in the BC beer market?
Please provide recommendations on the following:
What is the best way to convey quality and locality of Molson to consumers?
How can Molson distinguish quality from flavour?
How will your recommendations ensure the continued success of Molsons existing flagship brands?
Who are your recommendations targeting, and how will you target them?
What communication channels should be used?
Recommendations should be focused at a local level for the Vancouver and Victoria regions, and not at a
national level.
Please note that Molson is very profitable and thus has a considerable budget to allocate to marketing
and advertising. As such, budgetary constraints are not an issue regarding the viability of your
recommendations.
11
Appendices
13
14
Beer Coasters:
15
16