An Ultimate Light Beer Challenge for MillerCoors

Struggles to Differentiate and Grow Former Rivals While Taking on A-B

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CHICAGO ( -- Coors Light sales surged 5% in the second quarter; Miller Lite's declined 1.6%. That presents a conundrum for the newly merged MillerCoors: how to grow one without damaging the other -- and, tougher still, how to get both brands to gain ground on market leader Anheuser-Busch?

Light beer market shares
Source: Beer Marketer's Insights
Though recent sales have been strong, Coors Light is still light years behind Bud Light. In fact, both Coors Light and Miller Lite haven't simultaneously gained market share since the mid-1990s, a period when the premium-light-beer category grew explosively at the expense of their full-calorie siblings. Since then, each has posted robust growth only when the other stalled or declined.

The two brands are sold at similar price points, offer similar taste profiles and have, at times, centered their marketing on similar claims. So it's not all that surprising that they have spent most of the past decade bouncing between 7% and 8.5% market shares. In the meantime, Bud Light has grown from 15.6% in 2000 to 19.2% last year, according to Beer Marketer's Insights.

"You can't really deny that it's a flattish industry, and when one grows, the other necessarily doesn't," said Harry Schumacher, editor of Beer Business Daily. "They have a real challenge ahead to differentiate those brands" in a way that lets them both grow.

Second-quarter earnings results underscored that point. Coors Light has gained about 0.3 share points in supermarkets so far this year, while Miller Lite sales fell by the same amount.

Zero-sum game?
With its two largest brands seemingly mirroring each other, it may well be tough for MillerCoors to grow its share of the beer market. Executives around the industry, and at MillerCoors, say the two brands can gain ground at the same time. They point to the brands' relatively distinct geographic strongholds (Coors tends to be stronger in the Northeast and on the West Coast, while Miller's stronghold is the Midwest) as evidence that the brands can grow by cracking new markets.

They also see an opportunity to focus Miller Lite's vague "Ultimate Light Beer" positioning in a way that differentiates it more clearly from Coors Light and A-B's Bud Light, the brand they're both chasing. To achieve that, MillerCoors CMO Andy England is pushing Miller Lite to focus on the "More Taste" claim (presumably, of course, more taste than Coors Light), one of multiple claims for light-beer supremacy it's made recently.

"Our two flagship brands are complementary, both with distinct positionings: The essence of Miller Lite is to offer great taste, while frost-brewed Coors Light delivers Rocky Mountain cold refreshment," Mr. England said. He also noted the geographical distinctions: "In the majority of the country, Miller Lite and Coors Light don't interact much with each other, thus providing room to grow at the expense of our common competitor, Bud Light."

"There's no reason they can't do it," said one veteran industry executive. "The problem is just that Coors has tended to do shitty advertising at the moments when Miller was clicking, and vice versa."

Indeed, Coors Light's recent run of out-performance -- fueled by a relentless focus on its "Rocky Mountain refreshment" mantra -- has coincided with Miller Lite's stumbles in the wake of share losses under Crispin Porter & Bogusky's "Man Laws" campaign. When Miller lapped the industry in 2003 and 2004 behind a wildly successful campaign built around comparative carbohydrate and taste claims, Coors was navigating the fallout from its disastrous "Rock On" campaign, which abandoned its traditional focus on cold refreshment for an effort starring the "Coors Twins" that cratered sales.

Miller Lite's agency is Bartle Bogle Hegarty, while Coors Light's shop is DraftFCB.
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