Lalley leaves; Miller shifts to new products

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Miller Brewing Co. is searching for an executive to concentrate on new-product development now that its flagship Lite brand is on a steadier course.

Rich Lalley, director of new-business development and digital marketing at Miller and perhaps best known for his work on Molson Red Dog, quietly departed Miller earlier this month. A seven-year company veteran and former adman at D'Arcy Masius Benton & Bowles, he shepherded Miller's September launch of plastic beer bottles as well as the introduction of Henry's Hard Lemonade in the Pacific Northwest this fall.

Mr. Lalley did not return telephone calls seeking comment by press time, and a Miller spokesman would only say it had not been determined whether Mr. Lalley's replacement would come from within or outside the brewer.

Henry's, a fermented lemon brew, was Miller's first new product since spring 1999, when it launched Icehouse Light in the South. Henry's launch demonstrated that the Milwaukee brewer once again has begun devoting resources to new brands. Said one exec familiar with the company, `It's different from two years ago when absolutely nobody was working on new products."

Even so, Miller's sharpest focus should remain on its core brands, according to analysts and distributors. "At the end of the day, management expertise needs to go against the Miller Lite and Miller Genuine Draft brands," said Lehman Bros. analyst Michael Branca. "The mistakes of the past -- including excessive reliance on in-and-out new products -- are now being replaced with far greater emphasis on the core brands. The key to Miller's success will be [its] ability to drive the core franchise brands."

"In the past five to seven years, they had a philosophy of building business via new products," said another executive who asked not to be identified. He said that rather than foregoing new products or focusing on them, "the pendelum is swinging back to the middle."

The country's No. 2 brewer had been on a new-product hiatus as it tried to reverse a long sales slide for Lite and a slump for Miller Genuine Draft that began in 1995. Last year marked the first time since TK that Lite added volume, and the brand ended up matching sales from 1997, according to figures from Beer Marketer's Insights. MGD, however, continues to loose ground, down TK% in the last TK years. In the third quarter of this year, Miller sales fell TK%.

Mr. Lalley's departure likely will usher in the brewer's third management shuffle in just over a year. In the June 1999 executive shift, he was moved to global brand director on Lite from allied brands such as Molson, Foster's and Icehouse. In February, he was shifted into the new product post.

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