Heineken has signed a ten-year agreement with Molson Coors for the import and distribution of its Sol brand in the US.
Sol, which will continue to be brewed in Mexico, will be imported and marketed by Molson Coors’ US division, MillerCoors.
The agreement offers both brewers an opportunity to focus on key areas of growth within their respective portfolios, while increasing attention and investment to market opportunities in North America.
MillerCoors said that the addition of ‘an authentic Mexican beer’, combining Sol’s brand equity with its own sales and distribution capabilities, would create ‘significant development opportunities for both the short and long-term’.
It will pave the way for further investment in Heineken’s other Mexican brands, led by Tecate and Dos Equis – two of the fastest growing Mexican beers in North America.
Analysis: Changes to Heineken distribution
The announcement of this latest deal couldn’t be more timely for Heineken. The world’s second largest brewer has set about shaking up its distribution network. In May, it cut short its distribution tie-in with Coca-Cola Femsa in Brazil following its €665 million buyout of Kirin’s struggling Brazilian business. Instead, Heineken will leverage Brasil Kirin’s existing routes to market for the Heineken portfolio in the country. The partnership was due to last until at least 2022 and, when FoodBev reported on the announcement last week, Coca-Cola Femsa chief financial officer Hector Treviño had said the company was investigating what implications the move would have. It may still be that Heineken is forced to pay Coca-Cola Femsa a fee for ending the partnership early.
Also in May, the Dutch brewer said that it expected to reach an agreement in the Netherlands with Sligro Food Group over the sale of its beer and cider portfolio in the country. Sligro will assume responsibility for Heineken orders from the Netherlands’ hospitality sector – including processing, storing and delivering beer and cider to customers.
So the agreement reached with Molson Coors today is just the latest step in Heineken shaking up its global distribution network, as it looks to gain new ground on an invigorated Anheuser-Busch, which is currently superior to the tune of $42 billion. That’s the difference in revenues between Heineken and AB, as the beer market becomes increasingly consolidated.
Heineken Americas president Marc Busain said: “As far as Mexican beers go, Heineken USA is fantastically positioned with two strong brands in Dos Equis and Tecate. This effort helps focus our current portfolio, while accelerating Sol in the short and long-term.”
Commenting on the agreement, Molson Coors president and CEO Mark Hunter said: “Given the steady growth of the Mexican import segment in the US over the past few years, the addition of Sol represents a key addition to our portfolio. We are excited to be offering consumers even greater choice with the addition of Sol, and are confident we can grow the beer based on the brand’s strong equity and the added reach of MillerCoors’ national distribution network.
“This agreement clearly demonstrates the added speed and flexibility that comes with being the single owner of the US business, which allows us to quickly capitalise on strategic opportunities like this.”
The Sol brand has been part of the Heineken USA portfolio since 2004 and officially entered the global Heineken portfolio following the company’s acquisition of the Cuauhtémoc Moctezuma Brewery in 2010.
Upon completion of the initial ten-year term, Heineken will have the opportunity to reacquire the import rights and responsibilities for Sol. Financial terms were not disclosed.
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