Wholesaler 'Accelerated Consolidation' Likely
Dec 7, 2007 - As Miller and Coors prepare to merge their U.S. operations, the network of distributors that carry the two brands will be playing their own version of the mating game.
The Miller Brewing Co. and Molson Coors Inc. proposal to form the MillerCoors joint venture has distributors of just Miller or just Molson Coors products looking at buying competitors as they grapple with rising costs for fuel, materials and labor. Advertisement.
At the recent convention of the California Beer & Beverage Distributors in Southern California, Tom Cardella, president, sales and marketing at Miller said "I think there will be an acceleration " in consolidation due to the Miller Coors joint venture.
It was also suggested that the Miller/Coors deal may increase "geo-consolidation," where same-market competing distributors split the territory and flip brands - increasing efficiencies by decreasing market coverage but maintaining a strong portfolio.
"If you have competing distributors in the same market that carry brands like Miller and Coors that work well together, it just makes sense to consolidate," said Betty Buck, who heads a family-owned Miller distributor in Maryland.
With about $70 billion in gross sales, the beer-distribution industry has been evolving in response to consolidation and other changes among the nation's breweries as consumer tastes expand to include craft beers, wine and liquor.
Since 1995, the number of distributors has dropped from 5,500 to about 1,600 as smaller companies have been bought out, industry statistics show.