Molson Coors Beverage Company 10-K (2022-02-23)

For the fiscal year ended December 31, 2021

 

 

BUSINESS

 

Background

 

For more than two centuries, we have been brewing beverages that unite people to celebrate all life’s moments.

 

 

 

From Coors Light, Miller Lite, Molson Canadian, Carling, and Staropramen to Coors Banquet, Blue Moon Belgian White, Blue Moon LightSky, Vizzy, Coors Seltzer, Leinenkugel’s Summer Shandy, Creemore Springs, Hop Valley and more, we produce many beloved and iconic beer brands.

 

 

 

While our Company’s history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well. As a business, our ambition is to be the first choice for our people, our consumers and our customers, and our success depends on our ability to make our products available to meet a wide range of consumer segments and occasions.

 

aisle : a passage between rows of seats in a church, theatre, train, etc., or between rows of shelves in a supermarket

 

 

 

Molson and Coors were founded in 1786 and 1873, respectively. Our commitment to producing the highest quality beers is a key part of our heritage and remains so to this day. Our brands are designed to appeal to a wide range of consumer tastes, styles and price preferences.

 

 

 

Coors was incorporated in June 1913 under the laws of the state of Colorado. In October 2003, Coors merged with and into Adolph Coors Company, a Delaware corporation. In February 2005, Adolph Coors Company merged with Molson Inc.("the Merger").

 

incorporated : formed into a business company with legal status

 

 

 

Upon completion of the Merger, Adolph Coors Company changed its name to Molson Coors Brewing Company. On October 11, 2016, we entered into a purchase agreement with Anheuser-Busch InBev SA/NV to acquire 100% of the outstanding equity and voting interests of MillerCoors, previously a joint venture between MCBC and the former SABMiller plc. In January 2020, we changed our name from Molson Coors Brewing Company to Molson Coors Beverage Company in connection with our expansion beyond the beer aisle.

 

joint venture : a business or business activity that two or more people or companies work on together

 

in connection with something : on the subject of something

 

 

 

Our revitalization plan, announced on October 28, 2019, focuses on the execution of the following principal strategies: building on the strength of our iconic core brands, growing our above premium portfolio, expanding beyond the beer aisle and investing in our capabilities and supporting our people and communities.

 

revitalization : the process of making something stronger, more active or more healthy

 

execution : the act of killing somebody, especially as a legal punishment / (formal) the act of doing a piece of work, performing a duty, or putting a plan into action / (formal) skill in performing or making something, such as a piece of music or work of art 

 

 

 

Through the execution of the revitalization plan, we broadened our range of products and offerings within our portfolio to also include, among others, hard seltzers, ready to drink beverages and a variety of non-alcoholic beverage offerings.

 

seltzer : mineral water with bubbles

 

 

 

In order to support the overall premiumization of our portfolio, we have strategically de-prioritized certain non-core economy SKUs. The revitalization plan is intended to drive sustainable net sales and earnings growth, despite potential volume declines as the portfolio mix shifts towards a higher composition of above premium products.

 

composition : the different parts that something is made of; the way in which the different parts are organized / a short text that is written as a school exercise; a short essay

 

 

 

(omitted)

 

 

 

Industry Overview

 

The brewing industry has significantly evolved over the years to become an increasingly global beer market. The industry was previously founded on local presence with modest international expansion achieved through export, license and partnership arrangements.

 

 

 

Over time the market has become increasingly complex as the consolidation of brewers has occurred globally, resulting in a small number of large global brewers representing the majority of the worldwide beer market.

 

consolidation : the act or process of making a position of power or success stronger so that it is more likely to continue / (specialist) the act or process of joining things together into one or of being joined into one 

 

 

 

In addition to the consolidation and the acquisitive nature of the industry, exports, licensing and partnership arrangements continued to be used and these transactions typically occurred between the same global competitors that make up the majority of the market.

 

acquisitive : wanting very much to buy or get new possessions

 

 

 

At the same time, smaller local brewers within certain established markets have experienced accelerated growth as consumers increasingly place value on locally-produced, regionally-sourced products. 

 

 

 

In addition to the growth of smaller local craft breweries, changing consumer trends are pushing the industry toward above premium, including flavored malt beverages, craft beer and beyond beer altogether.

 

 

 

In recent years, the hard seltzer market has emerged and has experienced significant growth, particularly in the U.S. While we do not believe that the rapid growth will continue as the market has matured, we do believe the hard seltzer market will continue to be of importance.

 

 

 

As the beer industry continues its evolution of consolidation and diversification of its products to meet consumer demand with broadening preferences, we believe large global brewers are uniquely positioned to leverage the scale, depth of product portfolio and industry knowledge to continue to lead the market forward.

 

 

 

We believe we are well positioned to compete in this continually evolving market, particularly in beer, hard seltzer and beyond.

 

 

 

Global Competitors' Market Capitalization

 

capitalization : the use of capital letters / (business) the act of providing a company, etc. with the money it needs to function

 

 

We evaluate ourselves in relation to other global brewers using various metrics, including overall market capitalization, volume, net sales, gross margins and net profits, as well as our position within each of our core markets, with the goal to be the first choice for our people, consumers and customers. To provide a perspective of the relative size of the major participants in the global brewing market, the market capitalization of our primary global competitors, based on foreign exchange rates as of December 31, 2021, were as follows:

 

metric : a set of numbers or statistics used for measuring something, especially results that show how well a business, school, computer program, etc. is doing / the metric system

 

 

 

 

 

 

Our Products

 

We have a diverse portfolio of beloved and iconic owned and partner brands including Blue Moon, Carling, Coors Banquet, Coors Light, Miller High Life, Miller Genuine Draft, Miller Lite and Staropramen.

 

 

 

We continue to invest in and focus on growing these brands. In addition to these iconic brands, we offer products in the above premium, including flavored malt beverages (which includes hard seltzers), craft and ready to drink beverages, premium (which includes premium lights) and economy segments.

 

 

 

Further, our modern and growing portfolio expands beyond the beer aisle as well. We craft and distribute high-quality, innovative beverages with the purpose of uniting people to celebrate all life’s moments. The following includes the primary brands sold in each of our segments.

 

 

 

 

 

 

 

(the rest omitted)