Having spent the better part of the past decade trying -- and failing -- to find an answer to the fast-growth phenomenon that is Corona Extra, Miller and Anheuser-Busch are taking another shot. Undeterred by flashbacks to Azteca, Tequiza, Rio Cristal and Presidente, or the fact that Corona has -- as the "vacation in a bottle" -- arguably the strongest positioning in the market, the two giants are testing offerings: Miller Chill and Land Shark Lager and Chelada from A-B.
It's no surprise the big guys want to go after the upstart import. Between 2003 and 2005, Corona's shipments grew 10.5%, while A-B flagship Bud Light was flat, and its No. 2 brand, Budweiser, fell 7.4%, according to Beer Marketers' Insights. Shipments of Miller Lite rose 3.1% during that period but fell in the low-single digits during 2006. Corona's growth, on the other hand, continued in '06, though its momentum was slowed by a sharp price hike that's since been rescinded.
Miller Brewing Co.'s offering, Miller Chill, may be the most ambitious of the launches; it will come already infused with lime and salt. A Miller Chill label filed with the U.S. Alcohol and Tobacco Tax and Trade Bureau features the familiar script Miller logo backed by a series of Aztecan patterns and the word "Chill" in large lettering vaguely reminiscent of Corona's signature typeface.
In an unusual move for Miller, the launch -- set for Arizona, New Mexico, Florida, San Diego and Texas -- will be backed by a local TV campaign produced for Miller by Y&R, Chicago, the agency of record for Miller Genuine Draft.
"We've been growing at about 17% for the last 15 years, so it's not surprising people take notice and launch their own brands," said a spokesman for Crown Imports, which imports Corona. "But we find that consumers prefer an original, authentic brand." Its ad agency was similarly unfazed. "It seems like the big guys come out with these novelty beers once a year in a desperate attempt to rejuvenate the category," said Peter Krivkovich, CEO of Cramer-Krasselt, which has a longtime relationship with Corona. "But it's a formulation, and people see right through it."
Not an imitation?
A Miller spokesman said the TV ads weren't yet in production but would likely wind up as 15-second spots. The spokesman acknowledged that Miller was enamored of Corona's growth, but he said the brand wasn't intended as an imitation.
"It's more about an opportunity to create a chelada-style drink," he said (chelada is a beer mixed with salt and lime). Miller is also planning to import several South American brands from parent SAB Miller's portfolio in an attempt to tap into the Hispanic beer-drinking market and, hopefully, to tap some of Corona's success.
Not to be outdone, No. 1 brewer A-B's ever-expanding product pipeline features two brews that draw inspiration from south of the border.
A-B recently launched Land Shark Lager, a Corona-like light-colored lager produced in partnership with musician Jimmy Buffet. A-B calls the beer a "refreshing, drinkable lager brewed for the island lifestyle," and is distributing the beer exclusively at Mr. Buffet's Margaritaville restaurants and at his concerts.
Tour sponsorship pulled
Such limited distribution is unlikely to threaten Corona, but the brand severed a longstanding relationship with Mr. Buffet soon after word of his A-B deal broke in December. Corona pulled its sponsorship of his tour, which was believed to be among Corona's largest such partnerships.
Adding a further layer of complexity to A-B's sponsorship swiping is its 49% ownership stake in Modelo, which Wall Street analysts have repeatedly pointed to as one of the brewer's best assets at a time when U.S. domestic beer sales are slow and imports are growing quickly.
A second A-B product, which hasn't been released, is called Chelada, and consists of pre-mixed Budweiser and Clamato and is aimed at Hispanic drinkers. An A-B spokeswoman wouldn't comment on the Chelada, which was first reported by Beer Business Daily.