Coors warms to local beer-drinking habits

Updated: 2014-07-04 08:43

By Bloomberg (China Daily)

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Coors warms to local beer-drinking habits

CanadaCans of Molson beer are seen on a production line during a news conference in Montreal, March 19, 2012. Molson Coors inaugurated a new can line at the brewery. [Photo/Agencies]

Not all beer drinkers want to grab a cold one.

Molson Coors Brewing Co discovered this in China, where it altered its cold-activated Coors Light bottles and cans last year. The cans feature images of the Rocky Mountains that turn blue when the beer is at ice-cold temperatures.

But drinking cold liquids is widely seen as undesirable in China. Warmer beverages are considered healthier for digestion, an idea that stems from the traditional habit of boiling water to make it safer to drink.

In light of this custom, "we dropped the temperature for the thermochromatic ink", Peter Swinburn, chief executive officer of Molson Coors, said in an interview last week. "It still turns blue, but it's not so cold."

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In cans sold in China, the mountains on the cans and bottles turn blue at 41-44.6 degrees Fahrenheit (5-7 degrees Celsius), while the color changes at about 39.2 degrees F in the United States.

Such attention to detail is vital to Molson Coors as it pursues growth in developing markets. Rising income and a growing middle class are helping drive sales in countries such as India and China, where beer volume is predicted to increase by 7.9 percent and 3.6 percent, respectively, by 2018, according to Euromonitor International. Meanwhile, volume is forecast to fall in the US and United Kingdom by 0.7 percent.

Molson Coors, which has dual headquarters in Denver and Montreal, has been expanding in developing countries over the past four years. In addition to such recognizable brands as Coors Light and Carling, the company has a portfolio of local beers that cater to cultural palates. In April, Royal Brew - a whiskey-flavored beer - was introduced in India, appealing to the country's preference for hard liquor.

"We take into account local drinking habits, but brand identity will remain the same," said Krishnan Anand, president and CEO of Molson Coors International, who pointed out that in contrast to China, people in many of the Caribbean island countries drink Coors Light at freezing temperatures.

The company has paid particular attention to China, where development began a decade ago. Sales in China have seen a steady growth rate of 15 to 20 percent for the past eight years, according to Anand.

Molson Coors' core markets - the US, UK and Canada - are in decline, said Brian Yarbrough, an analyst at Edward Jones & Co in St Louis.

"They are looking for faster-growing markets to see consumption trends move up, which is why they're looking to international markets," said Yarbrough, who has a 'hold' rating on the shares.