Coors scouts U.S. biz chieftain

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alarmed by the precipitous sales slide for its largest brand, the board of Coors Brewing is seeking an executive to lead its U.S. business. The search, first reported on AdAge.com, is being conducted to find an outsider to eventually succeed President-CEO Leo Kiely, 57.

Potential candidates couldn't be identified. But whoever takes the job at the country's No. 3 brewer faces the unenviable task of revitalizing Coors Light, which represents a crucial 51% of global and 75% of domestic volume. The brand suffered its first volume drop in its 25-year history last year after posting marginal gains in 2002 and 2001.

Turning around declining beer brands is notoriously difficult. Anheuser-Busch hasn't done it with Budweiser after trying for well over a decade, and the timing is particularly bad for Coors to try.

miller revival

That's because SABMiller appears to have pulled off that unusual feat of brand resuscitation with Miller Lite, which posted its first sales increase since 1999 last year. Coors Light had benefited from Lite's weakness in the 1990s-now the reverse is true. Coors has "their work cut out for them," said beverage industry consultant Manny Goldman. "It's tough enough going up against A-B."

Shaking up marketing and advertising likely will figure high on the new executive's agenda, since Coors Light's high-energy, music-infused "Rock On" campaign hasn't converted young adults, said Brian Sudano, senior VP, Beverage Marketing. The two-year old campaign "hasn't helped sales," said Mr. Sudano, noting that Coors Light skews to drinkers who are 30 and older, while Bud Light is more popular with younger adults.

The softness continued even after Coors tapped Deutsch, New York, to work with Interpublic Group of Cos.' sibling Foote Cone & Belding, Chicago, the long-time agency on the brand.

The weakness of Coors Light is a sharp reversal from the gains it made in the late 1990s. The brand's shipments, including exports, grew by 4.4% in 1998, 5.2% in 1999 and 3.9% in 2000; during those years the overall category grew by about 1% annually, according to figures from industry newsletter Beer Marketer's Insights.

sliding

But Coors Light only managed a 1% increase in 2001 and in 2002 eked out a mere 0.4% rise despite a gain in the overall category each year of more than 1%.

In 2003 total Coors Light shipments, including exports, fell 2% to 16.6 million barrels as the overall U.S. beer category dropped 0.3%.

Coors has blamed some of last year's weakness on competition from beers with a low-carb positioning, including A-B's Michelob Ultra and Lite. To counter that, Coors has rolled out low-carb Aspen Edge nationwide; it will test Coors Edge in Dallas-Fort Worth starting in June (AdAge.com QwikFIND aap60u).

Sales woes and succession aren't the only factors behind the search, which indicates the board does not believe there is currently a clear-cut executive in its ranks to follow Mr. Kiely, who has not announced plans to retire. As Coors expands its overseas presence in recent years, more of Mr. Kiely's time is focused on international issues. And if company Chairman Pete Coors wins the U.S. Senate race in Colorado, Mr. Kiely potentially could add the chairman's job to his current load.

A Coors spokeswoman, while confirming the company is looking for an executive to run the U.S. business, said the search isn't driven by concern about domestic performance but out of a desire for Mr. Kiely to focus on worldwide strategy. The company acquired Belgian brewer Interbrew's Carling division in 2002.

Industry observers say Coors might try to pluck an executive out of A-B or a consumer product company like PepsiCo. Mr. Kiely, the brewer's first top executive from outside the namesake family, was president of PepsiCo's Frito-Lay unit before joining joining Coors in 1993.

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