MillerCoors still has a Miller Lite problem, with the brand failing to emerge from its long-running slump in the second quarter.

Sales to retailers fell by “mid-single digits,” which contributed to a 2.7% sales decline across all of the brewer’s brands in the quarter, the brewer reported today. MillerCoors, a joint venture of Molson Coors and SABMiller, was still able to grow earnings by 2.6% in the quarter to nearly $400 million, thanks in part to strong cost management, the company said.

But Lite’s decline, which came at the beginning of the all-important summer beer-selling season, is an ominous trend, considering that it had shown signs of life in the first quarter, with sales to retailers only down slightly.

“Coors Light has the momentum, distributor and retailer attention, super-models, NFL coaches, celebrities and CGI effects in their commercials. Miller Lite has table top buddy spots sitting in a fake bar from the 80’s with watered down puns.

Beer consumption is diminishing as younger legal drinking age drinkers are consuming more sophisticated spirits and specialty beer brands they drink less of. Beer brands with momentum are taking from those without.

Lower price strategy isn’t smart. Once you reduce, seldom does the volume follow because distribution will be diminished by retailers who want nationally promoted brands. Price brands aren’t that, they don’t have the margins to support national messaging and once you reduce price on brand, it’s a giant mountain to climb to ever rebuild margins.

There’s little hope for product or packaging innovation or identifying new audiences and usage occasions. That leaves the messaging as the best hope.

It has to be tough having Coors Light and Miller Lite in the same agency. One has momentum, the other declining. One is vibrant with spirited messaging, the other not so hip or relevant. Would it be so wrong for Miller Lite to not be contrived and just be genuine?”

Rodney Mason, CMO
www.moosylvania.com
http://twitter.com/rodmoose

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