Miller Lite is having issues on the sales front. In the second quarter, the light beer fell by mid single digits across retailers.
MillerCoors is citing a few reasons for the decline. Depressed economy, higher gas prices, even heavy rainfall. Yes, heavy rainfall. Apparently bad weather prevents people from going to stores and bars to buy Miller Lite.
This could put more marketing pressure on DraftFCB, Millers Marketing Firm. DraftFCB is responsible for the “Man Up” and “Lite Guard” campaigns. Apparently there is no talk in MillerCoors about a bigger marketing push.
This might be a sign of something bigger for Miller. The new CEO has already said “craft is the future.” Drinkers have more options today then they had 15 years ago, or even 2 years ago. Brands like Miller Lite will always have a market, but perhaps not as strong as it was just one year ago.
One last solution was discussed to help revitalize the brand – lower the cost. However that might not be an option. “We consider the price on the brand every day by market.” But he said a general price decrease would not work because “taking a brand down, it almost never comes back.” [AdvertisingAge]
You don’t get as big as MillerCoors without understanding the beer business. That’s why the company’s CEO Tom Long knows not to ignore the rise of craft beer. Long has been the CEO for a full month now, and is already speaking about the importance of the booming craft sector. In 2008, the company did some internal consolidation in order to save money. That maneuver worked, and now it’s time to grow. That’s where craft beer comes in.
Organic growth in craft and imports and light beer is our ambition because our future earnings power will come from that growth more than from cost savings, and so that is the challenge of the business.
Last fall the company created Tenth & Blake, a subsect of Miller dedicated to craft brands and imported beer. The need to invest in the craft industry has become widely apparent.
Staunch small beer drinkers aren’t going to be thrilled with everything he says though. He’s betting on a brewery bubble, thinking there won’t be over 1,700 in the future.
“[There] will not always be thousands and thousands of tiny brands,” Long said, referring to the 1,700 brewers in the U.S. today. “Big brands will emerge, and they already have: Sam Adams and Fat Tire and others. Certainly Blue Moon fits into that category”
Miller still sees light beer as the money maker. Seems like this is simple. Big beer shipments down. Small beer shipments up. Evolve or lose. [LATimes]
I’m sure you are all quite sad to hear – Miller has killed MGD 64 Lemonade line. In January, Miller announced they were adding flavored variations of the “64” line, aimed at low calorie drinkers, and summer beer drinking settings.
Today Miller called takesies backsies on the whole venture.
Winning in beer requires testing the bounds of the market with innovation,” Ed McBrien, president of sales wrote in an email Tuesday to MillerCoors distributors. “With that commitment, however, comes a recognition that not every innovation will succeed. That is the case with MGD 64 Lemonade, so we have decided to discontinue this line extension.
The remaining product will be bought back by the company. No word on how much the failed venture will cost. [BusinessJournal]
MillerCoors has just gotten pinched in Minnesota state government shutdown. Due to the state not being able to come to terms with a new budget, the government shut down on July 1st. Now in it’s 13th day, the shutdown is affecting bars – and especially MillerCoors. Now, the company will have to pull their beer.
Every 3 years, an application must be renewed to sell/distribute beer in the state. Miller didn’t get the permits resubmitted in time to make the shutdown. Without the renewed license, MillerCoors is forced to pull all 39 brands from the shelves. Seemingly, there is no workaround until the state begins operations again.
Bars to are having this issue too. You must possess a license to purchase alcohol for bars. Since there is no renewal, bars are running dry on beer. Inability to purchase can harm small breweries.
Steel Toe Brewing is attempting to open it’s doors, but can’t without a state inspector signing off on the new boiler. We are talking life savings on the line here.
Those breweries and bars with current licenses can continue sales and distribution during the government shutdown. Ironically, while the political battle wages on in the state capital, a bar in Minneapolis has already had to shut it’s doors. The name? The Independent.