These days the 65-year-old great-grandson of Adolph Coors says he's as busy as ever, presiding as board chairman of MillerCoors. He regularly attends sales meetings and visits big customers such as Disney and Darden Restaurants. "My title shouldn't be chairman, it should be cheerleader. I go around and wave the flag," he said.
This week he's doing his cheerleading from an RV, which he and son David are driving from Colorado to New York, commemorating the eastward journey Coors Banquet made some three decades ago when it grew from a regional sensation to a national brand. Actually, the Coors' aren't doing the driving. They have someone else handling that , as they stop in bars, restaurants and other Coors-selling establishments. "The evenings are packed full of beer drinking, so we figured it would be wise to have a driver," said David Coors, one of four children in the family business.
For effect, the RV is towing a 1940s-era Coors delivery truck as father and son roll through Indianapolis, Cleveland and other stops. As they came through Chicago, Ad Age sat down with Pete Coors at MillerCoors headquarters to get his thoughts on major beer trends and challenges facing the nation's second-largest brewer, which was formed nearly four years ago with the merger of Miller Brewing Co. and Coors Brewing Co.
Not in the alcohol business
The beer industry, Mr. Coors said, is still "battling wine and spirits, which have been in some way more clever than we have [been], particularly on-premise. As an example, you go into a bar and what do you see on the back bar? You don't see a bunch of bottles of beer. You see bottles of vodka and whiskey and stuff, backlit. It looks appetizing. It's interesting. It's clever. And what do you have for beer? Well, you have tap handles." Brewers, he said, "just need to do more of getting people to notice beer."
As a way to challenge spirits, MillerCoors competitor Anheuser-Busch this year introduced Bud Light Platinum, a higher-alcohol version of the light brew. Asked about that and if MillerCoors plans to follow suit, Mr. Coors said: "Traditionally, breweries haven't been in the alcohol business, so to speak. We're not selling products because we want people to drink more alcohol, we're selling them because they are refreshing and go well with food ... and so forth."
"We philosophically said we don't want to be in the high-alcohol business," he said. But he added: "Now, we may not be able to avoid that ... but it's a very ticklish thing because the taxation on wine and spirits and beer are different. We don't want to play in a place where we begin to confuse that ."
Still, the brewer has several new products in the pipeline, including "Coco Breve," flavored coconut water with 4.2% alcohol by volume (about what's in a light beer), which the brewer describes as "sparkling" and "subtly sweet," according to labels filed with the federal government. Mr. Coors said MillerCoors also plans to bring to the U.S. a cider-like brand called Redd's Apple Ale, which is owned by SABMiller and sold overseas. (SABMiller owns MillerCoors along with Molson Coors.)
Mr. Coors' road trip is primarily meant to plug Coors Banquet. First brewed in 1873, the beer for most of its history was a regional brand in the West. Eastern fans began clamoring for it in the 1970s, with buzz growing so strong that fans made special trips west so they could bring it back home. (A smuggling trip is the plot for the 1977 flick "Smokey and the Bandit.") These days, Coors Banquet is overshadowed by Coors Light and ranks just 24th among all beers, putting it in the same territory as Milwaukee's Best Ice, according to Beer Marketer's Insights. Still, Banquet -- which is still only brewed in Golden, Colo. -- is on the upswing, growing for six consecutive years, according to Beer Marketer's.
Consumers "kind of forgot about this brand when they went to light beers and now they are going to craft beers," Mr. Coors said. But at the same time, "they are kind of rediscovering [Banquet]," he added. "The big challenge we have is simply making it available, getting distributors interested in it."
Although burgeoning regional craft brewers are one factor that have hurt big brands, Mr. Coors credits them with "adding some romance to the whole concept of beer. I think craft beers have been good for the industry." He hastened to add that MillerCoors is "playing really hard in the craft business with Tenth and Blake," referring to the brewer's relatively new division for crafts and imports, which houses the successful Blue Moon brand. "We are the largest craft brewer in America. The craft brewers don't like to admit that . They won't let us in their club. But that 's where we are."
Still, he conceded the rise of small, regional craft brewers poses a challenge: "A salesman for a MillerCoors distributor may have up to 30 stops a day. You can't really build relationships like a craft brewer can. We've got to figure out how to do a little bit better job of figuring out how to sell."
Despite the craft surge, MillerCoors and Anheuser-Busch still control more than 75% of the U.S. beer market. One rumor that never goes away is that A-B global parent A-B InBev might one day buy SABMiller, although it would likely have to unload SABMiller's 58% financial stake in MillerCoors to avoid a monopoly.
"My take is that it's all analyst talk," Mr. Coors said. "They'd love to see it happen and ... bankers would love to have the opportunity to try to put that thing together," he said. "But I don't really put much into them ever coming together," he added. "It's just way too complicated." Indeed, the latest speculation has turned to A-B InBev possibly eyeing the North American beverage division of PepsiCo., another long-running merger rumor.
Miller and Coors
"We needed to do it," Mr. Coors said, looking back on the Miller-Coors merger. "We've exceeded $750 million in synergies. It's hard to believe how we would have survived without coming together."
Of course, Mr. Coors remains fiercely loyal to his family's brand. You'd be hard-pressed to catch him drinking a Miller Lite, for instance. Coors "is my brand. I'm not switching," he said, recalling what he told distributors the first meeting after the deal. "But you don't want me to switch. Because as MillerCoors, we don't sell another 12 ounces of beer if I switch from Coors to Miller. [And] if you're a Miller drinker, I don't want you to be thinking you've got to be socially correct in drinking Coors... We want to switch the other guy's drinkers. That's been the challenge."
We couldn't let Mr. Coors hit the road again before asking him about Zima. Advertised as "Zomething Different," the Coors-owned clear malt beverage skyrocketed out of the gate in the early 1990s, before plummeting a few years later and eventually was discontinued in the U.S. a few years ago.
What went wrong? "We decided to do Zima Gold, which was a huge disaster," Mr. Coors said. "And then we decided to take the nice fluted bottle and make it into a generic bottle. We killed the brand, frankly." He added: "We got too clever by half [with] marketing." Of course, the "marketing guys will tell you that it was somebody else's fault," he said with a laugh.
If you want some, it's still sold in Japan, where it does quite well, Mr. Coors said. Although it's doubtful his RV tour will be hitting the Far East anytime soon.
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