MillerCoors opened for business on 1 July 2008 with a big ambition – to become “America’s best beer company”. By exploiting the complementary strengths of the two companies and speedily completing the integration process, it promised to achieve US$500 million in annual cost savings by its third year of operation.
The bulk of the savings will come from producing both Coors and Miller products at all eight of the major breweries in its expanded network. By shortening shipping distances from brewery to market, the new production pattern will save 45 million freight miles a year – speeding delivery, cutting freight and fuel costs and reducing the company’s carbon footprint. Originally scheduled to take 18 months, the integration of the company’s breweries is running ahead of plan.
The cost savings are also flowing faster than expected. This has been driven by the speed at which the new organisation has come together, as well as the integration of the IT systems and the consolidation of services such as marketing and insurance.
The original plan was to achieve US$50 million in synergies in the first 12 months of operations. This figure is now expected to be US$128 million.
These successes show clear progress towards MillerCoors’ ambition. With its brands, people and scale, the business is already demonstrating that it’s a stronger, more competitive brewer than its constituent parts could have been on their own.