E-Malt.com News article: Ireland: Molson Coors buys Franciscan Well craft brewery in Cork

Molson Coors, the North America-based brewing giant, is tapping into the craft beer phenomenon by investing in a small brewery in Cork, Ireland, Financial Times reported on January, 14.

Craft beers have been the bright spot in sluggish US and UK beer markets, growing at about 10 per cent a year, according to Euromonitor. That has encouraged the big multinationals to pile in – even though doing so is at odds with the more independent vibe inherent to craft beers.

Molson Coors, which has bought the Franciscan Well craft beer brand and brewery on its 800-year-old site, is itself behind one of the biggest names in craft beer: Blue Moon, which is now owned by its joint venture with SABMiller in the US.

Blue Moon began life in 1995 in Denver, Colorado, under the Canadians and was subsequently folded into MillerCoors in 2008, which is 58 per cent owned by SABMiller, the number two brewer by sales.

Molson Coors – also following in the steps of the US venture – is now setting up a new craft beer division to house its growing stable, which includes Sharp’s Brewery in Cornwall and William Worthington’s microbrewery in Burton-upon-Thames.

Niall Phelan, who heads Molson Coors UK & Ireland’s emerging markets and craft beer division, says that the UK craft market grew 13 per cent year on year in 2012, and doubled in Ireland. “Even though money is tighter, people are looking for something for that special night,” he said.

Craft beers now account for about 5 per cent of the market in the US and UK. But as Spiros Malandrakis, alcoholic drinks analyst at Euromonitor, points out, success brings its own inherent contradictions.

Being bigger requires more muscle in distribution, manufacturing and logistics – all strengths that Molson Coors brings to Franciscan Wells – but in return that usually entails sacrifice of the independence and local provenance that to many consumers are the raison d’être of craft brewers.

The big multinational brewers, unsurprisingly, deny this, arguing that their craft divisions are run independently and bought on taste. Mr Phelan says his brief to those running his newest acquisition is “to go and just have fun and create some great beers”.

But Mr Malandrakis says: “We will see more launches by big brewers and see many smaller craft brewers go to the wall because there are already too many of them.” He says the former will also branch out into the less well-trodden turf of cider in the US.

There are more than 2,000 craft breweries in the US. Molson Coors did not disclose the price paid for Franciscan Wells, which is backed by venture capital.

16 January, 2013