Molson closes brewery

Molson Inc. announced that it would close its brewery in Barrie, Ontario, 100 km north of Toronto, on 1 September 2000. More than 350 employees will be made redundant. Molson plans to invest up to CAN$100 million over the next five years to expand its Toronto brewery and make it more efficient. The expansion will bring the Toronto capacity up to 5 million hl which places it ahead of the 4.3 million hl Montreal plant. The moves are part of a strategy to boost profits by making Molson’s breweries use their capacities more efficiently. The Barrie shutdown will help Molson save CAN$30 million a year. In 1999 Molson also cut 300 white-collar jobs in sales and administration. John’s, Nfld..

It‘s a first

AmBev and PepsiCo. Inc. have signed a contract which allows PepsiCo to bottle, sell and distribute Antarctica’s guaraná soft drink worldwide. Both companies expect guaraná to be among the top 10 best-selling soft drinks in the world within five years. PepsiCo’s president Steve Reinemund believes that Pepsi’s global sales (US$22.3 billion in 1998) should increase from 5 to 9 per cent with the sale of guaraná. Guaraná is currently said to be the market leader in the soft drinks category in Brazil. The AmBev-PepsiCo contract marks AmBev’s first move towards the internationalisation of its operations.

The American dream or whatever happened to Miss Ellie?The US brewing industry and the family silver

J.R. Ewing, TV’s most infamous Texan oil tycoon, would chase anything in a skirt, but his heart belonged to Mummy back home on the Southfork Ranch. Emigrants whether they were farmers, adventurers or gold diggers, pursued the American Dream which beckoned with promises of freedom, power, success. Ultimately they married a Miss Ellie, because those who had made their fortune wanted sons and a dynasty.

Daft’s decision

Following a major reorganisation by Coca-Cola’s Chairman and CEO, Doug Daft, Coca-Cola has created four strategic business units: Americas, Asia, Europe/Africa, and New Business Ventures. In March Steven Heyer, 48, formerly President of Turner Broadcasting Systems, was brought in to head Coke’s New Business Ventures unit. Coke insiders Jeffrey Dunn (Americas), Sandy Allen (Asia), and Charles Frenette (Europe/Africa) will head the other three units. The executives of the four units report directly to Daft.
The overhaul eliminated the need for a company president. Therefore Coke’s President and COO, Jack Stahl, 47, resigned..

Killarney’s Red Lager launched

Anheuser-Busch has launched a new speciality brew, Killarney’s Red Lager, which is supposed to appeal to consumers looking for a rich, full-bodied beer. Cashing on the lore of Ireland, promotional items will feature Irish imagery. The red lager has 5% alc./vol. and is brewed at Anheuser-Busch’s Fort Collins, Colorado, brewery. Anheuser-Busch has also launched 16-ounce contour cans of Michelob and Michelob Light that sport the brand’s tear-drop shape. Let’s hope the cans don’t give people ideas to cry into their beer. The contoured cans are sold as singles and in a 12-pack.

Craft brewing industry grew 4.1%

The year 2000 saw the continued stabilisation of the craft-brewing industry for both packaging brewers and brewpubs alike, according to figures released by the Institute for Brewing Studies (IBS).
Overall the industry grew 4.1%, more than doubling 1999’s 1.9% increase over 1998. The net volume gain for 2000 was 235,000 barrels, bringing total sales to more than 5.9m barrels. Craft brewing’s share of the total U.S. beer market remained at 3%.
Last year’s performance renewed confidence among brewpubs and specialty brewers. More brewers today say they are truly optimistic, rather than cautiously so at the end
of 1999.8m barrels. Among reporting regional speciality brewers, sales increased by an average of 8.7% per company..

Pabst to close Pearl brewery

At the end of April Pabst plans to close its brewery in San Antonio. More than a year ago Pabst had told its workers that the brewery was to be closed but then shelved the plan. In the meantime most of the production has been contracted out to the Miller plant in Fort Worth, which left the Pearl brewery with a production volume of 50,000 barrels last year instead of the one million barrels it brewed as recently as 1999. Pabst intends to keep its corporate staff in San Antonio and will continue to operate only one brewery, the Lehigh Valley brewery, in Pennsylvania.

Truce ... of sorts

After more than 60 years, ANOTHER Budweiser is being sold in the US again. Which one could it be? Obviously, it’s the one they brew at the Czech brewery of Budejovicky Budvar. In order to avoid being taking to court by Anheuser-Busch, the beer is sold under the name of Czechvar.
The state-owned Budejovicky Budvar and Anheuser-Busch have been fighting in the courts for decades over who has the right to the name Budweiser. In some countries the courts have sided with Anheuser-Busch, in others with the Czech brewer. Since 1939 Budvar has not been sold in the US when both brewers signed an agreement which effectively prevented the Czechs to sell Budvar in North America.35m hl and a 11.4% increase in revenues to 2.6bn Kc (US$71.8m). Exports to the UK and Germany more than doubled..

Grupo Modelo’s volume up 6.1%

In 2000, Grupo Modelo’s shipments of beer reached 36.5m hl, an increase of 6.1% over 1999. Domestic volume grew 4,1% and export 13.2%. Grupo Modelo announced that export shipments represented 23.4% of the total volume compared to 21.9% the previous year. For the 12 months ended 31 December 2000, Grupo Modelo’s consolidated income statement reported net sales of 29.3bn Pesos (US$3.3bn) versus 26.7bn Pesos in 1999. EBITDA was 9.0bn Pesos (US$942m). Grupo Modelo also made effective use of its cash pile of US$620m by buying the remaining shares in dozens of Mexican beer distributors for an estimated sum of US$90m. The brewer now wholly owns 64 domestic distributors.

Too much sex

Let’s try an do something drastic is often the last ditch attempt to save a brand. But it is also a risky move. Molson Canada, like South African Breweries (see below), has been sitting on a brand, Molson Export, for some time, which has not gone anywhere at all, certainly not upwards from its present 5% share of the market. Hence Molson dreamed up the advertising campaign, "Had Ex today?", in September 2000, which seems to have reversed the brand’s sales decline. The tagline "Had Ex today?" is a pun on the nudge-nudge, wink-wink kind of question "had sex today?" which is a staple concern of those in the throes of testosterone.
Incidentally, the new campaign represents a U-turn on the original Ex position as the tipple of choice for virile young men. The conversation runs like this.