MillerCoors/Tenth and Blake expand craft operations in Milwaukee

MillerCoors is getting ready to create more crafty beer. As the second-largest beer company in America, MillerCoors already captures nearly 30 percent of U.S. beer sales overall. Now, it has its market-dominating gaze lasered on the craft beer industry. According to a recent article in the Milwaukee Wisconsin Journal Sentinel, MillerCoors is expanding its craft beer-making footprint in the area. The company offers a variety of craft and import brands, including Blue Moon and Leinenkugel’s, through its Tenth and Blake division. Now Tenth and Blake Beer Co. has bought a 110,000-square foot building at 918 W. Somers St. from Securant Bank & Trust for an undisclosed price. We quote the article:

The building is next to the company’s Milwaukee brewery, at 1515 N. 10th St., where Tenth and Blake makes beers for Chippewa Falls-based Jacob Leinenkugel Brewing Co., a MillerCoors division. Tenth and Blake’s beverages include brands from Blue Moon Brewing Co. and Crispin Cider Co.

“As demand for our craft and specialty beers continues to increase, this additional space gives us the ability to expand our overall brewing and packaging capacity,” said Tom Cardella, Tenth and Blake president and chief executive officer, in a statement.

Tenth and Blake has plans to refurbish the two-story building, which was built in 1924, over the next several months and expects it to be ready in early 2014, cited the article. Led by two of the best-selling beers in America, Coors Light and Miller Lite, MillerCoors has a broad portfolio of brands across every major industry segment, including craft. And, of course, MillerCoors is a joint venture of SABMiller plc and Molson Coors Brewing Co. Considering the scope of MillerCoors products and distribution, how much do its craft brands actually contribute to its profit margins?

The Tenth and Blake portfolio, which includes imports, accounts for less than 10 percent of MillerCoors’ sales volume. But thanks to the higher profit margins enjoyed by craft beers and imports, it represents a larger, unspecified portion of MillerCoors’ operating income.