Molson Coors & SAB Miller: Create Better Beer, Not Mergers

by: George Gutowski

Molson Coors (NYSE:TAP) is joining with SAB Miller (OTCPK:SBMRY) to create a brewing juggernaut. The power of Budweiser (NYSE:BUD) in the US is such that they want to gang up and hope they can take some market share.

The true problem is that much of the beer is all the same taste. No one is really brewing a better or distinctive beer. Its all about the market, market share, girls in skimpy clothing, and how many truck loads per minute are shipped. Most beers are truly boring, more like carbonated cool-aid with some alcohol content is what the current offerings are really like.

The market is not growing according to script. This means the customers do not really like your products. Look how easy it is to introduce a new import brand and have people try it for a while. Heads turn easily because they are not truly into the big brands.

The one thing the big brewers have not tried is real quality. In the meantime its a battle of spreadsheets and financial engineering supplemented by B school case studies about how incredibly difficult it is to sell beer. Take a lesson from other consumer products companies and introduce true high end and create value, not mergers.