Latest shake-up at Miller may give O&M Lite leg up

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Miller Brewing Co. is coming off its second management shuffle in a year as distributor concern about agency work continues to mount. The change could end up benefiting beleaguered Lite shop Ogilvy & Mather, New York.

The country's No. 2 brewer has placed Erv Frederick, VP-brand management since February, in charge of day-to-day operations for its five primary beers and secondary brands, according to executives close to the company. President-CEO John Bowlin recruited Mr. Frederick from Maxwell House Coffee, another subsidiary of Philip Morris Cos.

The move could be a boost for Ogilvy, even as the agency struggles with concepts for next football season and as distributors pillory its "Grab a Miller Lite. It's Miller Time" work.

DISTRIBUTOR DISPLEASURE

Ogilvy won the Milwaukee brewer's account in July, but was dealt a slap in the face when Lite's Hispanic shop, Square One, Dallas, was asked to produce several general spots (AA, Jan. 24). Many distributors say Ogilvy's only good ads have been extensions of the so-called "debate" ads championed by previous agency Fallon, Minneapolis.

Insiders say Mr. Bowlin could shift work from Square One to Ogilvy. "Bowlin and Frederick are the only people in the world who love Ogilvy," one insider said. "The brand people are pulling their hair out."

A Miller spokesman denied there was any tension between the brand team and Ogilvy.

In other shuffles, Senior Brand Managers Tim McDougall and Tony Besasie are replacing Brand Director Rich Lalley. Miller's first shake-up came with last July's appointment of Mr. Lalley to head Lite. According to a memo from Senior VP-Marketing Bob Mikulay to Miller's more than 500 distributors, the June reorganization was designed to make the brewer "a more flexible, responsive and focused organization and help us make more effective use of the exceptional talents of our people."

STRIFE-TORN TURF

Mr. Besasie, who had worked on Lite and Plank Road Beer, and Mr. McDougall, senior brand manager on the budget/malt liquor portfolio, step into roles with a strife-filled history -- particularly between their predecessor and Mr. Bowlin, according to insiders. Mr. Bowlin, a former president-CEO at Kraft Foods International, did not ask brand experts' advice before anointing longtime Kraft agency Ogilvy. In turn, Ogilvy is circumventing brand shepherds by going directly to the more receptive Mr. Bowlin, according to executives close to the company.

"They are not being allowed to run their businesses," an executive said. "The [agency was] put in by Bowlin without . . . even asking if they knew what they were doing, and the brand folks are charged with getting the best work . . . [out of an agency that doesn't] know what to do."

Some distributors are so disgruntled at ads for Lite -- within a hair of losing its No. 3 standing to Coors Light -- they're saying Fallon's widely criticized two-year "Dick" campaign wasn't so bad after all.

"There is nothing [in the Lite ads now] that has a competitive angle," an Eastern wholesaler said. "With Dick, at least there was a point of difference. You could argue about the effectiveness, but the idea in my mind was right. Some stuff was too far out there, but that differentiated it."

PALTRY SPENDING

Sales for Lite and Miller Genuine Draft, which is handled by J. Walter Thompson USA, Chicago, actually are up, but distributors say that's because of their aggressive selling efforts -- not overall corporate strategy or even adequate ad spending from Milwaukee. For the 52 weeks ended April 23, Lite sales rose 9.4% to $467 million, while MGD sales rose 6% to $198 million, according to Information Resources Inc. Industry sales were up 8% during that time.

Miller's ad spend continues to be paltry. Last year, it actually lagged behind No. 3 Coors Brewing Co., spending $165.1 million in measured media compared with Coors' $166.1 million, according to Competitive Media Reporting.

"You look at what Coors is doing; they seem to be hitting on all cylinders, and Anheuser-Busch is [doing well]," the East Coast distributor said. "Miller is just like the gang that couldn't shoot straight."

Distributors are lukewarm about JWT's ads for MGD and say they too fall short of the "world class advertising" Mr. Bowlin said he expected. Still, the agency's hold appears to be strong: In April, Miller handed JWT the $9 million Foster's account.

"[Ogilvy and JWT] are Bowlin's guys," the executive said.

Ogilvy, JWT and Square One did not return telephone calls seeking comment.

Other staff moves include: Mr. Lalley, who launched Red Dog and the failed Miller Beer, was named director of new business development. Chad Vincent, group brand director of Miller's premium brands Icehouse, Molson, MGD and Foster's, resigned in May and will head the H.J. Heinz Co. frozen meals division. He was replaced by Ann Stickler, senior brand manager on MGD and Icehouse, and Mike Johnson, brand director on Molson and Foster's. Mr. Johnson -- who was appointed director for above-premium brands and strategy -- also will handle the specialty brew Henry Weinhard's. Former Miller High Life chief Karen Conorqui will head ethnic marketing. Pat Moertl, senior brand manager on Icehouse, will lead High Life and Allied Brands as senior brand manager. They all will report to Mr. Frederick.

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