US: MillerCoors aims for high-end beer in US, as 'premium light' stagnates
MillerCoors is aiming at the high-end beer market
MillerCoors is targeting the 'above premium' segment to drive growth in the beer market in the US, pinning its hopes on its craft and imported beer stable.
The company, which is jointly-owned by Molson Coors and SABMiller, has admitted that it is over-present in the 'premium light' segment in the country, but is aiming to raise its footprint at the more expensive end of the US market, through brands such as Blue Moon, Leinenkugel's and Redds apple ale.
Figures released at a MillerCoors presentation in London today (20 June) showed that, while 'above premium' accounts for 30% of the total US beer market, the segment represents only 7% of MillerCoors' portfolio.
'Premium light', however, accounts for 57% of MillerCoors' total volumes, but only 35% of the industry's volumes as a whole.
'Above premium' is defined by the firm as having a 100-plus index, where 100 is the price point for the likes of Budweiser, MGD and Coors Banquet.
“We're significantly under-indexed (in 'above premium'), despite nice positions with Blue Moon, a nice position with Leinenkugels and other import beverages,” said MillerCoors' CEO, Tom Long. “We need to build a strong 'above premium' portfolio to complement our 'premium light' business.
“By 2016, we expect our position to be much improved, and we think it will look more in-line with the industry.”
The division is aiming to up the share of its portfolio held by 'above premium' to around 11% by 2016, at the expense of the 'premium regular' and 'economy' segments.
“The economy segment is declining and we are too large in it,” added company CMO Andy England. While the 'economy' segment is declining by around 1% per annum in value terms, MillerCoors said that it has three times as many brands in the segment as Anheuser-Busch InBev, but with around 30% lower sales compared to its competitor.
At the same presentation in the US earlier this week, the company confirmed its plans to shake-up its low-margin beer category as it plans to dump its non-core brands and heavy glass packaging.
MillerCoors said today that it intends to raise the media spend behind the Blue Moon beer and Redds apple ale going forward, and is looking at launching a Blue Moon variant that will appeal to Latino consumers in the US. It will also expand the footprint for its Leinenkugel summer shandy range with the national roll-out of an orange-flavoured variant.
After a lively year for our industry, Stuart Whitwell from Intangible Business takes a look at what the next 12 months could have in store for the beer and spirits categories....
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