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Molson Coors (TAP) to brew new high-end beer

In an effort to fight back against shifting consumer trends to spirits and wine, the Wall Street Journal reported that Coors Brewing Co. (NYSE: TAP) has created a new subsidiary to "introduce above-premium beers to the marketplace," according to an email sent to beer wholesalers last week.

The move comes at a time when the American beer business is facing considerable headwinds, including slower growth due to upscale "craft" beers and a strong push for market share by imports. Anheuser-Busch Cos. (NYSE: BUD), the largest American beer maker, and SABMiller PLC's (NYSE: SAB) Miller Brewing Co., the second-largest, have already introduced new beverages to combat these headwinds.

Molson Coors, on the other hand, has focused more on its Coors Light, Keystone and Blue Moon brands instead of dabbling in a new taste. The company said it would create new upscale beers at a pace similar to how they built Blue Moon, which took over a decade. The Belgian-style wheat ale is now one of the fastest-growing American beers.

The move to create a new "craft" beer will not be done overnight, especially if Molson Coors expects to follow the same pace of their Blue Moon label. For every Blue Moon in production there are hundreds of beers that fail to make the grade. If the company expects to create a top-selling beer, investors need to understand the new subsidiary will act more like an R&D drug company for Molson Coors' bottom line, rather than a full-fledged beer unit. Good things take time.

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Last updated: September 06, 2008: 08:03 PM

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