Analysis

MillerCoors brand strategy gets warm reception – Analysis

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The next couple of years carry great importance for MillerCoors. Not only is the US JV between Molson Coors and SABMiller set to come under new ownership in the coming days, but it also has work to do to stem revenue declines, achieve flat sales volumes by 2018 and secure growth the following year.

MillerCoors moves to Molson Coors control in the coming days

MillerCoors moves to Molson Coors' control in the coming days

It's a task that requires a multi-faceted strategy and some bold steps in order to succeed – but early indications are positive, according to analyst Pablo Zuanic at Susquehanna Financial Group. In a note following a strategy update given to wholesalers by MillerCoors last Monday (as part of the National Beer Wholesalers Association conference), Zuanic praises the plan as "a more consistent and better-articulated strategy than in years past".

The highlights, for Zuanic, are a more coherent plan for the company's value brands (which account for about 23% of its US volumes); a "more in-your-face" campaign for Miller Lite (26% of volumes), confronting arch rival Bud Light head-on, and an expansion of the message for Coors Light (31% of volumes).

MillerCoors is abandoning its Millennial-friendly "I am rich" campaign for Miller High Life, replacing it with a more traditional "If you've got the time, we've got the beer" strapline. This wins Zuanic's approval for its targeting of a broader demographic, in contrast to the previous "confusing" message.

Turning to Miller Lite, the plan here is to go up against market leader Bud Light more directly, mocking the latter's "Raise one to right now" strapline with the brand's own "Raise the right one to right now" message – a move that leaves Zuanic "encouraged", and that he believes might help the brand erode Bud Light's formidable market share.

The plan is less radical with the still-improving Coors Light, where the "Climb on" campaign will be maintained, with an additional emphasis on sport under the theme of "One team… One mountain".

On the higher price-points, a new brand – Goldwing – will try to succeed where Miller 64 and Fortune have failed in taking from fast-growing Michelob Ultra, launching initially in Louisiana and Texas.

In a broadly positive analysis by Zuanic, there was only one minor gripe: the lack of attention for craft brands Blue Moon and Leinenkugel's – both of which were recently pulled from MillerCoors' Tenth & Blake craft unit. Highlighting the recently-worsening trends for the above-premium portfolio, Zuanic would have liked to hear more about these brands as MillerCoors poises to roll out more of its craft acquisitions nationwide, including Terrapin, Hop Valley and St Archer.

"We are poised" - Molson Coors CEO on MillerCoors buy


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