A Tale of Two Brewing Businesses: One Macro and One Craft

I'd show you a nice glamor shot of their Boston brewery but...

Well, almost.  Boston Beer is the one company which I guess you could say straddles the line.  But, say what you will about the business model, Boston Beer is built upon quality beer, not light lager volume.

First, the big. Molson Coors is hurting:

Molson slumps in 3Q as economy saps beer money
By SARAH SKIDMORE, AP Business Writer – 1 day ago

PORTLAND, Ore. (AP) — Molson Coors Brewing Co.'s third-quarter profit tumbled 23 percent as high costs and high unemployment among its core customers continued to take a toll on the brewer.

Molson Coors and other major beer makers have struggled in the down economy as young American men have faced particularly high levels of unemployment. The company, which makes products like Miller Lite, Coors Lite and Carling, also saw lower-than-expected sales in the U.K. And the industry is seeing consumers overall shift toward more craft beers, wines and spirits.

The company is also struggling with higher costs for commodities such as barley, aluminum and fuel.

"We have had the equivalent of an earthquake," Peter Swinburn, president and CEO of Molson Coors, said of the recession. "Our core consumer was hit overnight... It is very difficult to recover from that, it takes time to rebuild."

Next, the slightly less big. Boston Beer is not:

Boston Beer 3Q profit rises on higher revenue

BOSTON

Boston Beer Co., which brews Samuel Adams beer, said Tuesday that its profit grew in the third quarter as shipments increased.

The company reported net income of $16.3 million, or $1.19 a share, for the three months ended Sept. 24. That compares with net income of $15.4 million, or $1.09 a share, in the comparable period last year.

Net revenue surged 8 percent to $134.8 million from $124.5 million a year earlier, driven by a 7 percent gain in shipment volume.

Analysts were anticipating, on average, earnings of $1.13 a share on $131.9 million in revenue, according to FactSet.

"We are happy with the health of our brand portfolio and remain positive about the future of craft beer," said Jim Koch, chairman and founder.

Curious that the AP byline is Portland, Oregon. Where better to report about beer, I guess. Anyway, the empirical question that I still wonder about is whether the growth in craft beer is from new converts while those that have already converted reduce their overall consumption in the down economy, or is it the case that even craft beer drinkers are not reducing consumption? I suspect the former.