Molson Coors CEO, Peter Swinburn on Beer Flavors and Innovation

SUSIE GHARIB: Say the name “Molson Coors” and you think beer. Now, there’s
a new twist — with tea. The company is coming out with Coors Light Iced
Tea. It will be test marketed in Canada in April before coming to the U.S.
When I met with CEO Peter Swinburn today, I asked him, what’s the idea
behind the new beer.

PETER SWINBURN, MOLSON COORS CEO: It’s a great combination. The
world’s most refreshing beer gets aligned with the most refreshing non-
alcoholic drink. But there’s two things together, and you got total
refreshment. That’s what it’s all about.

GHARIB: So, what does it taste like? Is it sweet?

SWINBURN: No, not at all. It’s very, very faithful. It’s, of
course, light, so it tastes like a beer and it’s got overtones of tea. So,
it’s a beer with tea, as opposed to an iced tea with alcohol.

GHARIB: You know, Peter, you recently bought a company that makes
cider, Crispin Cider.


GHARIB: But tell us why were you interested in that?

SWINBURN: Well, it really fits into our overall strategy of
broadening our portfolio to make sure that we’re satisfying different
consumer needs. So, cider is very big at the moment and — in terms of
growth, very small in terms of volume. But certainly, consumers say back
to us that they like the idea of a different long alcoholic drink that’s
refreshing and very crisp.

GHARIB: So, you’re moving into the special flavors. Who are you
targeting? What type of consumer?

SWINBURN: Well, we’re targeting regular beer drinkers that just
wanted a difference now and again. But also, we’re targeting people that
don’t normally drink beers for whatever reason — and also trying to target
certain occasions, in this instance, summertime refreshment.

GHARIB: We all know that people are drinking more wine and cocktails.
So, how are you dealing with that? Are you going to be introducing more of
these unusual flavors?

SWINBURN: What we’re going to concentrate on, more than anything else
is continuing to make our core brand relevant, because that what drives our
profit. So, brands like Coors Light or Miller Lite in the U.S. very much
that take all of our focus.

GHARIB: So, how is the beer business doing?

SWINBURN: Well, at the moment, and most of the markets, it’s
challenged. But our job, quite simply is to increase our earnings,
increase our margins. Invest behind our core brands, innovate around our
brands, and also expand internationally as well into new markets.

GHARIB: So, how are you dealing with the drop off in business?

SWINBURN: Well, I think, you know, we concentrate on our core brands
and also that’s innovation as well. We have to make sure the brands are
relevant. So, for example, Coors Lite and Miller Lite, we’re bringing out
aluminum pints this year, resealable, to keep the freshness in. Also for
Miller Lite, we got a punch top can which actually allows you to have two
choices and makes the beer come out of the can much more smoothly.

GHARIB: But aren’t those kind of packaging, innovation, something
that can be easily copied by your competitors?

SWINBURN: Well, no, I think that they can be copied, but it doesn’t
really matter because what you’re doing is you’re bringing value to the
consumer, and the consumer recognizes that, and they’re willing to pay for
it. So, it’s a much better way that just using price as a lever .

GHARIB: And what about the international markets, the emerging
markets, like China and India and other places? What kind of growth due
expect there?

SWINBURN: Well, we focus where we can actually make a big difference.
So, China is the biggest beer market in the world. India is the fastest
growing. Russia was a very big beer market. Ukraine is the second biggest
beer market in Eastern Europe.

We’re not going to put a lot of money behind breweries or putting a
lot of capital in. But we’ll put a lot of money behind our brand building.

GHARIB: Back here in the states — I mean, to what extent does bad
news and good news about jobs and gasoline prices impact your business?

SWINBURN: It does impact. Our core consumer, when you narrow it all
down, is a legal drinking age male to 29 years old. And unemployment for
that category is twice the national average. So, undoubtedly, it impacts
us. There’s not much we can do about it. And that’s why we just
concentrate on the things we can affect.

GHARIB: And, you know, Tom, despite the challenges, the company
recently reported quarterly earnings that surged 58 percent.

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