Molson Sells Coors Light in Costa Rica,
Mulls Brewery
By Duane D. Stanford
(Bloomberg) -- Molson Coors Brewing Co., the
biggest beer company based in North America,
begins selling Coors Light in Costa Rica
today and is considering adding a brewery in
Latin America.
Costa Rica will bring to about 30 the number
of countries, including Mexico and China,
where Coors Light is sold. The Denver- and
Montreal-based brewer is taking advantage of
a growing trend toward light beer in
countries that have leaned toward
full-calorie brews traditionally, said Paul
Mendieta, managing director for Mexico, the
Caribbean and Central America.
The company may need to develop
manufacturing in Latin America to
accommodate growth of Coors Light, its
best-selling brand, he said. Options may
include building a brewery or cooperating
with another brewer, according to Mendieta.
“As we continue to expand into new markets,
it is definitely something that we plan on
addressing,” Mendieta, 51, said in a Sept.
18 telephone interview. He declined to
specify potential timing of such a move.
Brewing locally would cut freight charges, a
“significant portion” of the cost of selling
in the region, he said.
Molson Coors was unchanged at $48.10 at 4:15
p.m. in New York Stock Exchange composite
trading. The shares have lost 1.7 percent
this year.
The challenge for Molson Coors is choosing
markets without a dominant international
competitor where consumers are already
comfortable with the taste of light beers,
said Erin Ashley Smith, an analyst with
Argus Research in New York.
Market Challenge
“They don’t have as much international
exposure as a number of beer companies they
are competing with,” Smith said in an
interview. “Long term, they are going to
need to look outside the U.S. for some
growth to be able to compete better.”
Overall beer sales by volume in Latin
America surpassed those of North America in
2007 and will grow 20 percent by 2013,
according to researcher Euromonitor
International. The Coors brand, with almost
7 percent of Latin America’s import beer
market in 2007, faces competition from
Anheuser-Busch InBev NV’s labels.
Leuven, Belgium-based AB InBev’s Brahma and
Budweiser brands together held 42 percent of
the import market there, according to
Euromonitor data.
Budweiser Expansion
“We are researching and carefully evaluating
the best approach to expand Budweiser,”
Marianne Amssoms, a company spokeswoman,
said yesterday in an e-mail. “This is a mid-
to long-term effort.”
Latin America’s growing middle class has
brought a taste for light beer back from
travels to the U.S., Mendieta said.
Distributors in at least five South American
countries have asked for Coors Light in
recent months, Mendieta said.
Coors Light, known as the “silver bullet”
because of its silver can, started selling
in Puerto Rico about 15 years ago. It has
since been exported to countries including
Mexico, where sales grew from about 15,000
hectoliters in 2004 to 118,000 hectoliters
last year, according to Molson Coors. North
America and the U.K. are the brand’s largest
markets.
Overall volume sales of imported lagers,
which include U.S. light beers, grew 54
percent in Latin America in the six years
ended 2008, while domestic lagers grew 34
percent, according to Euromonitor.
Light beer generally contains less alcohol
and fewer calories than full-flavored beer.
Coors Banquet has 5 percent alcohol and 142
calories per 12-ounce can, compared with
Coors Light which has 4.2 percent alcohol
and 102 calories.
Thermographic Ink
Coors Light is sold outside the U.S. as an
import beer, fetching more per unit in China
and parts of Europe, for example, than at
home, Rob Borland, chief marketing officer
for global brand and market development,
said in June.
The brewer has marketed Coors Light overseas
much as it has in the U.S. and Canada, using
“Rocky Mountain Cold Refreshment” as its
advertising tagline, Mendieta said. Printed
in thermographic ink, mountains on the cans
and bottle labels turn from white to blue
when the package is chilled.
The company is curbing costs by translating
existing advertising, instead of producing
new ads. It introduced Coors Light’s
“cold-activated can” in Mexico and Panama by
re- editing a 30-second television
commercial initially shown in North America,
saving about $500,000, Mendieta said.
The packaging and advertising helped boost
global Coors Light sales by 3.4 percent in
the first half of this year as Molson
Coors’s total beer volume fell 3 percent,
the company said.
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