Challenging A-B: Carb craze fuels $300M beer battle

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The nation's big three brewers are prepping for the most pitched beer brawl since light beer shook up the market 30 years ago.

Responding to the stunning success of low-carb beers, Anheuser-Busch, Coors Brewing and Miller Brewing Co. are collectively adding upward of $300 million in media, particularly to support brands that help avoid beer gut. While it's not certain America's carbohydrate phobia will be a long-term boon for brewers, Michelob Ultra has captured of 2.1% of supermarket sales and it was clear at Coors and Miller distributor meetings last week that rivals aren't waiting for the phenomenon to pass.

Miller's was the most highly anticipated meeting, considering its six-month Miller Lite sales streak. Emceed by P.J. O'Rourke, it featured marketing guru Scott Bedbury, who talked about discipline, and actor Christopher Reeve, who built off the meeting's passion-centric theme to talk about finding a cure for spinal cord injuries.

Miller is trying to parlay its recent successes into a stronger relationship with distributors, many of which are also wholesalers for Coors, and it seemed to work. "The meeting was totally over the top," said a distributor who attended both meetings, adding that the Miller event drew its first standing ovation. "It was the best day I've had at a Miller meeting in 10 or 12 years. If you stepped out today for a second you missed something big."

The distributor said Miller vowed to boost local radio spending 17% over last year and raise total media outlays during April through June by 66%. The brewer also unveiled more than two dozen TV spots for Miller Lite and Miller Genuine Draft. They included six MGD spots from Interpublic Group of Cos.' Martin Agency; a Viagra spoof via WPP Group's Ogilvy & Mather; and a slapstick spot by WPP sibling Y&R, Chicago, showing bar patrons literally beating themselves up for picking the wrong brew.

choice challenge

But the highlight was a five-spot election-themed series from independent Wieden & Kennedy, Portland, Ore. That package, set to run from May through July, centers on a presidential candidate on the campaign trail. In a debate with a Clydesdale, he pokes fun at the King of Beers to urge consumers to be democratic and vote for Miller as the "president" of beers. Miller plans to use the campaign as the basis for a taste challenge of Miller Lite and Bud Light, said Bob Mikulay, Miller's exec VP-marketing.

Anheuser-Busch is still the undisputed king of breweries, with a commanding 51.6% share of domestic volume compared to Miller's 18.7% and Coors' 11.3%. But at the brand level, according to Beverage Marketing Corp., Miller Lite has staged a comeback. Despite selling just one for every two Bud Lights in 2003, Miller Lite volume growth outpaced it, surging 2.6% to an 8.1% share. Bud Light still leads, with 19.5% of volume in 2003, up 2.4%; Coors Light's volume fell 0.6% to 8.5% of share.

But Anheuser-Bush is on the offensive. Morgan Stanley analyst Bill Pecoriello estimated the brewer will add $50 million in media weight to protect Bud Light, which received $129 million in measured media in 2003, according to TNS Media Intelligence/CMR. Anheuser-Busch won't comment on budget, but the company is also expected to spend $100 million in marketing for Ultra.

A-B has also lowered the carb and calorie count on Natural Light to less than that of Miller Lite, and, to neutralize Miller's claims, Bud Light is running four ads with the message that all "light beers are low in carbs ... choose on taste," via Cannonball, St. Louis.

Following its first-ever volume decline for Coors Light, Coors is pulling traditional media spending on five "street-fighter" brands such as Killians and Keystone to put an estimated $200 million toward Coors Light and Coors Original. Industry insiders estimate Coors will also put between $30 million and $50 million behind low-carb Aspen Edge, which breaks TV ads April 1. Coors showed 20 new spots from Interpublic's Foote, Cone & Belding and Deutsch at the company's distributor meeting in Hawaii.

"I think people are starting to see that A-B is a little vulnerable right now," said the Miller distributor, so rivals are trying "to grab as many drinkers as they can."

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