MillerCoors Discusses the Challenges of Lite Beer

By Jim Cohen | December 27, 2011 | 0 Comments |
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Beer volumes are down for the third consecutive year. Why? Many consumers are switching over to wine and liquor, and small craft breweries are luring consumers away from the high volume light beers. MillerCoors CEO, Tom Long, took over the company in June 2011 and has been tasked with overcoming the challenge of a shrinking market.

Currently, Miller Lite is struggling. The beer is still a quarter of the company’s total volume (which is huge), but the brand has less than half the market share of Bud Light. The company isn’t struggling though as price increases and reduced costs have continued to increase profits over the same three years when volumes have decreased. However, that can’t last in perpetuity.

In a recent interview with the Wall Street Journal Long discussed the challenges and future strategy of the mega brewery. In the past year, with an aggressive marketing push, Coors Light has been doing quite well; however, the company wants to do a better job Long said, “Coors has benefited the most from the combined distribution of the new company as the smaller of the two. There were much bigger distribution gaps in Coors. Miller Lite is a little bit victimized by our significant success in Coors Light, but that's no excuse. We've got a job to do on Miller Lite.”

Miller Lite intends to grow in 2012 with new advertising, packaging and positioning. In fact, you can expect a new can with a second opening that allows the can to have a smooth flow rate (do people really need help drinking beer now?).

Over the past few years, the marketing pitch has rested with “taste.” Long believes that in the light beer arena, taste resonates with many consumers as craft beer grows. However, that being said, it needs to fit within the context of light beer, which obviously can’t offer the same taste that a heavy IPA or rich stout can.

MillerCoors expects dramatic growth in their craft beer unit: Tenth and Blake. Long said, “We're a big player in craft. The single-biggest brand in craft is Blue Moon, which is ours. The fourth-biggest brand in craft is [our brand] Leinenkugel's.” The company expects their craft beer segment to grow ~60% over the next three years.

Long was unclear if light beers can sustain their tremendous market share for the long run. As consumers change their preferences, the industry will have to adapt. It is clear that craft beer is an increasing focus of the company (as seen with a minority interest in Terrapin). At the same time, to resurrect a brand like Miller Lite, you can change the marketing and packaging, but you can’t change the beer inside.

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



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