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MillerCoors Attempts to Use Their Craft and Light Beer Lineup to Awaken a Sleepy Giant

By Blake Potolicchio | July 14, 2011 | 0 Comments |

Big beer has had it rough. Across the U.S. as craft breweries continue to post impressive revenue growth, traditional light lagers have seen decline. MillerCoors is no different. For example, MillerCoors’ domestic sales-to-wholesalers declined by 3.0% in 2010.  There is no question the big brewers are waking up and smelling the coffee, understanding that mainstream beer brands might not be as relevant to young drinkers as they once were. 

Recently, the company agreed with that sentiment. MillerCoors CEO, Tom Long, wants to stay ahead of the curve by promoting his long line of light beers more as well as further developing craft brands.

Quick history: Denver-based Molson Coors Brewing Co. merged their U.S. operations in 2008 with London-based SABMiller PLC as a strategic attempt to keep pace with the world’s largest brewer, St. Louis-based Anheuser-Busch. Anheuser-Busch as we know was more recently purchased and now owned by Belgium-based Anheuser-Busch InBev NV.

Problem for Big Boys: These big brewers blame a high unemployment rate in their core customer base of 21-34-year-old men for their steady decrease in sales over the last few years. Beer shipments are expected to finish flat or slightly down in 2011, after a 1% overall decrease in 2010 and a 2% decrease in 2009. If 2011 shipments decline again for 2011, it could mark the FIRST three-year decline since the 1940’s.  

Learn by example: The top brass at MillerCoors want to emulate the growing popularity in the craft and premium micro-brew category. Despite the craft beer market’s 5% market share of the beer industry, analysis from Beer Marketers Insights projects that share to increase to almost 10 percent in about 5 years if industry sales remain flat (the economy doesn’t seem to be adding very many jobs now does it).

Solution: Blue Moon was created from the ground up by MillerCoors and just recently they announced the strategic formation of Tenth and Blake, a dedicated division for its craft and import brands. Long states that he does not believe there will always be thousands of tiny brands brewed by the over 1,700 craft breweries. He believes there are already large brand emerging in this field such as Sam Adams and Fat Tire…and Blue Moon.

MillerCoors wants to make sure some of their brands become these winners. In addition to this strong push to corner the craft and import market with some of their brands, MillerCoors understands they need to improve the marketability of their light beers line as it is still their primary focus due to the amount of exposure world-wide their brands get. 

When you couple the volume of beer they need to make to cater to the light beer audience and throw in a recession with rising commodity costs, any type of pricing increase on the product will need to be countered with a strategic marketing twist to remind drinkers that they still love what they drink.

Your Choice. Your Beer. Drink Up.
- Beer Universe