Taste of Rockies, Milwaukee-style

03.06.2008 03:00 Home - Source: JS Online

Coors Light, which bills itself as refreshment "as cold as the Rockies," could soon be brewed from water as cold as Lake Michigan.

Miller Brewing Co. and Coors Brewing Co. officials confirmed Monday that Coors Light could be brewed at Miller's Milwaukee brewery after the planned joint venture between the two companies becomes official.

That move will create more work for the local brewery, which has about 800 employees. It also will cut shipping costs for Coors Light, which accounts for 72% of Coors Brewing's sales volume.

Other Coors brands also could be brewed in Milwaukee and at Miller's five other large breweries in Ohio, North Carolina, Georgia, Texas and California, Miller spokesman Pete Marino said Monday.

Some of Miller's brands could be brewed at the two Coors breweries in Golden, Colo., and near Elkton, Va.

No final decisions can be made until the joint venture, known as MillerCoors LLC, receives antitrust approval from the U.S. Department of Justice, said Marino and Coors spokeswoman Kabira Hatland. The joint venture could be completed this month.

Once MillerCoors begins operations, the joint venture will make "significant" investments to allow Coors Light to be brewed in Miller breweries, Hatland said.

Coors Light will continue to be brewed with the same recipe and ingredients, and will continue to be "frost brewed," which involves inserting special liners in cans of Coors Light to keep the beer colder, she said.

One Coors brand that won't be produced in Milwaukee is Coors Banquet. That brand makes up only about 5% of Coors Brewing's sales volume, but it has enjoyed a recent revival. Coors Banquet still runs ads that highlight the beer's water.

Coors Light drinkers probably won't care that their beer may not have been brewed in Colorado, industry consultant Joe Thompson said.

"I just don't think it'll make any difference," he said.

Saving on shipping

When the planned joint venture was announced in October, Miller and Coors executives said combining their eight breweries throughout the country would reduce shipping costs. That will be a big part of the $500 million of annual savings that Miller and Coors executives say they can achieve through the joint venture, Thompson said.

Coors will be the bigger beneficiary of lower shipping costs by spreading production of Coors Light and other brands to the Miller breweries, especially those in Milwaukee, Irwindale, Calif., and Fort Worth, Texas, said Thompson, president of International Beverage Group.

With just two breweries, Coors ships its beer farther than its competitors, which makes the company more vulnerable to fuel cost increases, according to the 2007 annual report from Molson Coors Brewing Co., the corporate parent of Coors Brewing.

Those shipping costs, long a concern for Coors, have become an even bigger issue with this year's soaring gas prices, said Thompson, a former national sales director at Coors who is based in Hilton Head, S.C.

For most of its 136-year history, Coors operated just one brewery. The Golden facility is the world's largest brewery, and it grew throughout the 1970s and '80s as Coors Banquet cashed in on its Rocky Mountain mystique.

Coors Banquet for decades was sold only in the West. As demand grew, the beer was first sold east of the Mississippi River in 1981. It wasn't available in all 50 states until 1991.

For years, Coors Banquet has been sold as being brewed with "Rocky Mountain water." Ads for Coors Banquet referred to rival brews as "flatland" beers.

With the coming MillerCoors joint venture, Coors Light will now have more than two places to be brewed. That's welcome news for Milwaukee, said Harry Shayhorn, president of Brewery Workers Local 9, which represents a large portion of the 800 employees at the local brewery.

"Business will come into the Milwaukee brewery," Shayhorn said.

More local brewery workers might be hired to handle the additional production, Marino said. Even if that doesn't happen, he said, the increased activity will help ensure the long-term sustainability of the Milwaukee brewery, which is Miller's oldest facility.

Headquarters unknown

Coors Light would be one in a long list of beers made at Miller's Milwaukee brewery. Along with Miller's brands, such as Miller Lite, High Life and Milwaukee's Best, the Milwaukee plant also brews brands owned by Pabst Brewing Co. Pabst, which doesn't operate a brewery, hires Miller to produce Pabst Blue Ribbon, Schlitz and other beers.

What's not yet known is how many non-brewery jobs might be cut in Milwaukee as a result of the joint venture.

Miller has around 900 employees at its Highland Blvd. headquarters. Some of those administrative and office positions will likely be eliminated as a result of consolidation and cost cutting by the joint venture.

There's also the question of where the MillerCoors headquarters will be located. That facility, which could have around 100 employees, might end up in Chicago, Dallas or another location other than either Milwaukee or the Denver area.

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