|
|
After Successful Launch, Miller Brand Fizzles to Bud Light Lime |
|
Tuesday, 07 October 2008 |
Miller Chill ranked as one of Miller Brewing Co.'s most successful product launches ever when the lime-infused beer saw strong sales in its 2007 debut. But Chill has since chilled after being challenged by Bud Light Lime, a similar beer launched this year by Anheuser-Busch Cos.
Executives at MillerCoors LLC, formed by July's joint venture of Milwaukee-based Miller Brewing and Coors Brewing Co., are now considering ways to tweak Chill's marketing efforts in response to a fizzling performance.
"We're going to be working to make sure more consumers discover the brand," said MillerCoors spokesman Julian Green.
Chill was a big hit for Miller last year, posting sales of around 500,000 barrels. While that's only 1.2% of Miller's annual sales volume, Chill sold at higher prices -- with stronger profit margins -- than much larger brands such as Miller Lite and High Life.
Chill, a light beer brewed with hints of lime and salt, also drew half of its sales from drinkers who previously shunned beer in favor of spirits and wine, according to Miller.
In May, Anheuser-Busch launched Bud Light Lime, which it advertised as having "a splash" of lime, and "the superior drinkability of Bud Light." Its debut was backed by a $35 million marketing campaign, according to Beer Business Daily, an online trade publication.
If Miller Chill was a home run, Bud Light Lime has been a grand slam for Anheuser-Busch.
The St. Louis-based brewer said recently that Bud Light Lime's launch helped drive a companywide 3.6% increase in volume sales for the quarter ending Sept. 30.
Bud Light Lime posted nearly $50 million of sales in supermarkets, drug stores and mass merchandise outlets (such as Costco and Target) during the 13 weeks ending Sept. 7, according to Information Resources Inc., a Chicago-based market research firm. That period covers the beer industry's key summer selling season.
Meanwhile, Chill's sales in supermarkets, drug stores and mass merchandisers totaled around $13 million -- a 47% drop from the same period in 2007, according to Information Resources.
How sweet it is
Bud Light Lime's strong sales are fueled by an increasing number of drinkers who want a somewhat sweeter beer, said Marlene Coulis, Anheuser-Busch vice president of consumer strategy and innovation.
Bud Light Lime has a stronger lime taste than Miller Chill, which has a more "balanced" taste, said Charlie Papazian, president of the Brewers Association, a trade group made up mainly of craft brewers.
That stronger lime flavor is a factor in Bud Light Lime's soaring sales and Chill's decline, said beverage industry consultant Tom Pirko.
"They out-limed 'em," said Pirko, who operates BevMark LLC, of Santa Barbara, Calif.
The launch of Bud Light Lime "certainly impacted our sales," said Green, of MillerCoors.
Green, however, says Anheuser-Busch's much larger distribution system, and greater marketing resources, are the main factors behind Bud Light Lime's success.
Anheuser-Busch has just under a 50% U.S. market share, while Miller accounts for around 18% of the market. The MillerCoors merged operations have around 29% market share, but the new joint venture is still combining the two distribution systems, which likely will take several months to complete.
"They have enough muscle, whenever they want to, to push people aside," Pirko said about Anheuser-Busch.
Marketing a winter Chill
Chill, despite the sales drop, is still "a great product with a loyal base" of customers, Green said.
"A half-million barrels is nothing to sneeze at," he said.
MillerCoors needs to make sure it has an effective marketing position for Chill, he said. That's especially important during the fall and winter months, to prevent Chill from becoming just a summer beer, Green said.
Anheuser-Busch faces the same challenges with broadening the summer appeal of Bud Light Lime, and with maintaining the brand's momentum in 2009.
Anheuser-Busch, which is being acquired by Belgium-based global brewer InBev Corp., has a history of dropping new products that did well when first launched but then saw fading sales, according to a report by analyst Carlos Laboy, of Credit Suisse.
Coulis said the marketing commitment to Bud Light Lime will continue next year.
Meanwhile, Anheuser-Busch has been running fall TV spots that feature Bud Light Lime at football tailgates, Coulis said.
The tagline from those ads: "Seasons change. Tastes don't."
Copyright (c) 2008, Milwaukee Journal Sentinel
|
|
|
