Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy Government PANICs! Sterling Collapses! - 19th Mar 20
Coronavirus Market Crisis - Nowhere to Hide! - 19th Mar 20
Coronavirus Most Likely GDP Economic Outcome for Q1 and Q2 2020 - 19th Mar 20
How COVID-19 Leads to 2008-Style Bank Crisis - 19th Mar 20
Coronavirus Impact on Global Economic GDP Numbers - 19th Mar 20
Bticoin Crash Big Channel Review - 19th Mar 20
Gold is Doing Its Job…Silver Will Come Back as a Safe-Haven Asset - 19th Mar 20
The Chartology of Coronavirus Deflationary Event - 18th Mar 20
Fed Slashes Rates to Zero and Introduces QE in Response to COVID-19. Will Gold Rally Now? - 18th Mar 20
Coronavirus - Nothing to Fear but Fear Itself - 18th Mar 20
The Stocks Bear Market Is Upon Us... Or Not - 18th Mar 20
US and UK Coronavirus Containment Incompetence Resulting Catastrophic Trend Trajectories - 17th Mar 20

Market Oracle FREE Newsletter


Hot Emerging Market Stocks For Global Growth

Companies / Investing 2009 Aug 11, 2009 - 06:25 AM GMT

By: Money_Morning


Best Financial Markets Analysis ArticleJason Simpkins writes: With sales volume plunging in Western markets, Molson Coors Brewing Co. (NYSE: TAP) and SABMiller PLC (OTC ADR: SBMRY) are tapping into emerging markets for refreshing growth.

SABMiller, for instance, saw beer sales slump 7% in Europe and 0.8% in the United States, while Africa and Asia combined for 11% sales growth. Sales in China alone soared 17% in the quarter.

"While demand in Europe has dropped sharply, countries in emerging markets such as Africa and Asia have fared relatively well despite falling back from the high - one might say unsustainable rates of growth of recent years," said SABMiller Chairman Meyer Kahn.

As a percentage of commercially produced alcohol, beer now accounts for 49.0% of the market in Africa and 32.8% in Asia, Meyer said.

In China, SABMiller's success is largely attributable to the popularity of a Chinese beer named Snow, which recently supplanted Bud Light as the world's most popular beer. Snow is a brand of beer brewed by SABMiller and its partner China Resources Enterprise Ltd. (OTC ADR: CRHKY) and it encompasses at least two-dozen varieties.

The only problem is that while SABMiller's Chinese unit accounted for about 14% of sales volume, it contributed just 2% to earnings because of low pricing. But that's something the company expects will change as sales rise.

The growth rate of beer sales in Asia over the past five years remains the highest of any region, averaging 8.4%, according to SABMiller. China, in particular, has seen beer-sales growth averaging 10.7% per year.

The "margin story is improving gradually," SABMiller spokesman Jonathan Oates told Bloomberg News.

There's a similar story unfolding in Africa, where total beverage volumes grew by around 10% organically. That increase has been helped greatly by particularly strong growth in Tanzania and Angola, where the company is building new brewing facilities.

SABMiller's brewing and beverage operations cover 14 countries in Africa, with a further 19 covered through a strategic alliance with French wine-and-beer distributor Castel group.

SABMiller is the No. 1 brewer by market share in most of these countries.

The company has operations in Vietnam, a joint venture in Australia, and now exports significant volumes to South Korea and Taiwan, as well.

"We are also judiciously expanding our geographic footprint in other parts of the world where it makes sense to do so," said Kahn. "In the past year, we've acquired one of the larger breweries in the Ukraine and a beer and malt operation in Nigeria, each marking our first entry to the country in question. In the case of Nigeria, the move takes us into the only major African market in which SABMiller did not previously have a presence."

Molson Coors' Blowout Quarter

Molson Coors is looking to broaden its geographical footprint, as well. And it's working.

Taking a global approach to its business helped Molson Coors to more than double its profit in the second quarter from a year ago. Second-quarter profit at Molson Coors jumped 136.3% to $187.3 million from $79.4 million in 2008. Underlying after-tax income rose 20.6% to $205.4 million or $1.11 per diluted share, up from $170.3 million, or 92 cents per diluted share a year ago.

Those gains came despite sales volume declines of 2.9% in Canada and 12.4% in the United Kingdom - two of the company's biggest markets.

Molson Coors' joint venture with SABMiller, known as MillerCoors, was also a big help.

The two companies struck a deal last July that combined the shipping, transportation, and brewing resources of America's two largest breweries. Now, instead of being shipped from Denver, Coors Light can be made and shipped out of Miller's East Coast production plants, saving on shipping.

The companies predicted $50 million of cost savings in the first year of the joint venture, but had reached $78.4 million by March of this year. Miller and Coors now expect cost savings to be $128 million in the first year, and have shaved six months off their three-year goal of saving $500 million.

MillerCoors reported underlying net income, excluding special items, increased by 16.4% to $325 million. Even more impressive, the company grew its global markets business by 18% in the second quarter, thanks in large part to strong Coors Light sales in China.

"For Molson Coors Brewing Co., it's been an unqualified success," Sam Walker, the beermaker's chief legal officer and managing director, told the Denver Business Journal. "Our objectives of brand-building take time, but we're starting to see evidence that giving more choice to consumers in many markets is ultimately going to lead to success."

Another way Molson Coors expanded choices for its customers was by obtaining the exclusive distribution rights to Singha, a Thai lager that has 95% distribution in Thai restaurants.

"For our customers, its positioning as an authentic brand offers an opportunity to build their retail offer around high value, growing Thai, Japanese and Asian Far Eastern food occasions, as well as becoming part of a valuable 'World Beer' segment," the company said.

Singha joined Molson Coors' portfolio of 10 specialty beers that make up the Different World Drinks Co., a business-to-business company that aims to promote foreign beers to bars and retailers. The other nine beers consist of:
  • Blue Moon.
  • Dos Equis Lager.
  • Dos Equis Ambar.
  • Groelsch.
  • Groelsch Weizen.
  • Kasteel Cru.
  • Kasteel Cru Rose.
  • White Shield.
  • And Zatec.
Molson Coors has also hired Adeye - a mobile marketing company with offices in Norway, Sweden and Denmark - to promote the line of beers.

Stock Prices Rebound

Both SABMiller and Molson Coors have seen their stock prices race back from their early-March lows, a period in which the benchmark Standard & Poor's 500 Index has rebounded 49%.

Since bottoming at $31.44 each on March 16, Molson Coors' shares have slightly lagged the S&P, though they've surged a still-respectable 46%. Molson Coors closed yesterday (Monday) at $45.79.

SABMiller has performed even better. From their March 9 nadir of $12.44, SABMiller shares have zoomed 80%, closing yesterday at $22.33. And they're up 32% so far this year - easily outdistancing the benchmark S&P (+10%) and rival Molson Coors (-6.0%).

Analysts have established a consensus one-year target price of $50.56 for Molson Coors shares, which would represent a gain of about 10% from yesterday's close. The Denver-based firm's shares feature a 2.1% dividend yield.

Obscure Law Forces Companies to Come Clean on Gold Mandatory government filing NI 43-101 required gold mining companies in Canada to disclose how much gold they really have. This one company's filing just revealed that it�s sitting on the 7th largest gold strike in North American history. Few know about this yet. And for a short time, savvy investors will be able to buy gold for 17 cents on the dollar. Read the full report.

Money Morning/The Money Map Report

©2009 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules