Molson Coors poses challenges for CCA

By James Atkinson

It won't be easy for Coca-Cola Amatil (CCA) to build from scratch the Molson Coors portfolio of beer brands that are little known in this market, liquor industry sources have commented.

The partnership with Molson Coors was not the high profile announcement that had been widely anticipated ahead of CCA's relaunch into beer at the end of this year.

"My gut feel is that they were hoping to launch with Corona or Heineken, which have existing volume and cut through and brand equity, but it didn't eventuate," said one source.

"They talked a big game and haven't really delivered."

CCA executives are bullish about the potential of the unnamed, soon to be introduced Molson Coors brands, which they yesterday argued have existing brand equity in Australia.

But this was met by scepticism in the trade, in the light of rival SABMiller's existing relationship with Molson Coors in the US, through the MillerCoors joint venture.

"SABMiller's in partnership with Molson Coors, so clearly SABMiller would have first dibs on those brands and they probably said 'no'," another industry source commented.

"They'll sell a bit but it'll be hard yards – the reality is that building brands from a zero base is a very long-term and expensive prospect."

The US brewer's flagship Coors Light brand has had previous starts in this market without establishing a foothold. 

But the Australian market's appetite for American beer brands has matured over the last decade, with both Budweiser and Miller now making a respectable contribution to the respective volumes of Lion and Carlton & United Breweries (CUB).

However, Bud and Miller obviously benefit from being part of vast, supplementary portfolios that CCA will not have, should it launch Coors Light in this market.

CCA should leverage total beverage solution

Speaking to TheShout, a banner group boss questioned why CCA does not exploit the cost efficiencies of packaging all its beverage segments together for customers.

"By leveraging Jim Beam, Coca-Cola and some of their other great brands, and now beer, it is easier to get half a pallet or a pallet deal across all those brands," he said.

"Logic says they should leverage it as one total solution, but for some reason they want to treat them all as separate businesses."