Molson Coors Brewing is a brewer and has a portfolio of owned and partner brands. Co. operates the following segments: Canada, which consists of Co.'s production, marketing and sales of the Molson brand family; the U.S., which consists of Co.'s interest, and results from its interest, in MillerCoors LLC, its joint venture with SABMiller for all U.S. operations; Europe, which consists of Co.'s production, marketing and sales of its brands in the U.K., Ireland and Central Europe; and Molson Coors International, which is comprised of Co.'s business and brand portfolio in markets, including emerging markets, outside the U.S., Canada, U.K. and Central Europe.
Molson Coors economic moat is dug from its strong brand portfolio. Strong brand names allow the firm to offset volume declines with price increases. Relationships with national distributors allowing the firm to get better placement on retail shelves than smaller brewers. The company also has significantly more resources to use for advertising its craft portfolio than smaller craft competitors.
Molson Coors will probably start 2015 with a soft showing. Unfavorable foreign exchange rates will likely hurt results given TAP's global footprint. Business should pick up, particularly in North America, as TAP heads into peak sales season in the months ahead. Coors Light and Blue Moon ought to be strong performers. The company announced a share-repurchase program. It is authorized to buy back up to $1 billion worth of stock within the next four years. Note that the board also raised its quarterly dividend payout 11%, to $0.41 a share. All told, it appears management is rewarding stockholders for their recent patience.
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Leading position in its core markets
Diversified sources of supply
Strong brewery and distribution warehouse network in its core markets
Reliance on few brands for majority of revenues
Stringent advertising regulations to control irresponsible portrayal of alcoholic drinks Intense competition
Increasing labor wages
Entry into the craft beer business amidst rising demand globally
Shifting consumer preferences towards low-alcohol beer
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