MillerCoors confirmed the launch today in a memo to distributors that described Fortune as a beer "with edge, intrigue and charisma" that will come in an all-black bottle with an embossed design. The brew, which will debut early next year, is poised for a "big-time" marketing push, according to the memo. Publicis Groupe's Saatchi & Saatchi, New York will handle advertising.
Ad Age first reported on Fortune's possible introduction earlier this year after MillerCoors secured the brand name with the U.S. Patent and Trademark Office.
MillerCoors will also launch a new cider brand called Smith & Forge Hard Cider that will also be backed with significant marketing. The brand -- which checks with 6% ABV, above the average cider alcohol content -- seeks to capitalize on the growing cider trend, but exploit what the brewer described as a "massive unmet need" for ciders that target males. The agency is WPP's Cavalry.
MillerCoors and Bud Light-owner Anheuser-Busch InBev are experimenting with new brews in order to keep pace with the changing tastes and drinking patterns of Americans, who are increasingly buying craft beers and liquor. While the changing marketplace has brought some pain to big brands in the form of declining sales, it has also brought opportunity. That's because drinkers seem more willing to pay higher prices for premium – and often higher-alcohol -- brands. Fortune will be priced similarly to Platinum, whose average case price is $26.17 compared with $20.11 for regular Bud Light, according to IRI.
Up until now, MillerCoors' innovation strategy had avoided big line extensions. Rather, the brewer poured resources into new brands such as Redd's Apple Ale, an apple-flavored malt beverage, and Third Shift, a lager positioned to compete with craft beers. All the while, A-B InBev followed Platinum's launch with other big line extensions, such as Budweiser Black Crown, which is also 6% ABV. By comparison, Budweiser has 5% ABV and Bud Light and most domestic light beers check in at 4.2%. While craft beers tend to have more alcohol, they cover a broad range. For instance, a popular brand such as Sierra Nevada Pale Ale has 5.6%, but some trendy crafts check in with ABVs at 10% or even higher.
MillerCoors executives insisted all along that they were not opposed to big line extensions and that they would pursue them if they drew new drinkers rather than cannibalize existing brands. With Fortune, the brewer hopes to recapture drinkers who have shifted to liquor. "Everything you see about the brand is informed … by the expectation of spirits drinkers," including the jet black bottle, MillerCoors VP-Innovation David Kroll said in an interview. He said he expects that consumers and bartenders might even pour Fortune in a short glass rather than a traditional beer pint.
Bud Light Platinum, which comes in a sleek blue bottle, was also launched to target spirits drinkers. With a higher ABV and slightly darker colored liquid than Platinum, Fortune is aimed almost exclusively at males, including African American Americans and Hispanic consumers, Mr. Kroll said. Platinum "is a bit more female-oriented," he said. "They are using Justin Timberlake and they are avoiding sports and marketing on things like the Grammys."
Fortune -- whose bottleneck shows an "M" for Miller inside a spade playing-card logo -- is the "trump card that turns any night into that night," according to the distributor memo.
The brand name for Smith & Forge is a reference to blacksmithing and forging. Marketing will avoid the orchard imagery that is so common with other ciders. "Guys in particular just haven't felt fully comfortable enjoying cider," Mr. Kroll said. Smith & Forge really is about bringing the "grit and greatness" back to cider, he added, noting that the cider category was larger than beer in the pre-Prohibition era.
As a line extension, Fortune will be looked at to help breathe some life into the larger Miller franchise. While Coors and Coors Light have performed solidly in recent years, Miller Lite, Miller 64 and Miller High Life have consistently posted sales declines.
Anheuser-Busch has experienced similar declines with its core brands, Budweiser and Bud Light. But analysts have credited the brewer's line-extension strategy with improving the prospects of the overall Bud franchise. In addition to Platinum and Black Crown, A-B InBev has launched Bud Light Lime Straw-Ber-Rita and Bud Light Lime Lime-A-Rita. All of the extensions come with higher price tags.
"We continue to believe management's focus on innovation around its two largest brands, Bud Light and Budweiser, is a winning strategy," Mark Swartzberg, an analyst for financial services firm Stifel, said in a recent note to investors. "It is creating margin-enhancing volume while preventing more significant declines in the core brands by aligning and re-aligning them with changing tastes."
Still, after rocketing out of the gate in early 2012, Platinum has slowed. The beer controlled 1.15% of the beer category as of mid-July, compared with 1.21% in mid-May, according to IRI, whose figures to not include bar and restaurant sales. Platinum sales fell 24.9% in the 13 weeks ending July 14 to $88.8 million.
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