Miller readies slew of alternative brews

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Miller Brewing Co. is prepping its biggest new product push in six years as it preens itself for a possible sale.

Once a new-product category leader, Miller-the first to aggressively push a palatable light beer and the first to aggressively market bottled draft-is returning its attention to innovation. It's ready to unleash a troika of entries in the red-hot malt beverage category, led by Skyy Blue in March. The other two, riffing off Allied Domecq Spirits & Wine North America's Sauza and Stolichnaya (likely to be called Stoli Citrona), are due in June. Miller, meanwhile, also charged WPP Group's Y&R Advertising, Chicago, with a massive new-products research assignment.

Combined spending for the three lines has been estimated at $100 million, though it's uncertain how much of the total will come from Miller and how much from its two partner distillers: Campari Group's Skyy Spirits and Allied Domecq.

The alternative ready-to-drink malt category ballooned 67% in volume last year, although the segment represents only 2% of the country's moribund beer market, according to figures from Beer Marketer's Insights. But Denis McGarry, Miller's VP-general manager of enterprise brands and business development, said Miller believes the beverages eventually could reach up to 12% of the market. "We think, unlike other categories that have come and gone ... these products are here to stay," he said. "It's a nice-size niche."


Y&R wouldn't comment on the nature of the new products, and Mr. McGarry declined specifics. He would say only that Miller is testing products, flavored and otherwise, with and without the Miller name.

He said the only advertising agencies involved in the new products are Y&R; Skyy's Lambesis in Carlsbad, Calif.; Sauza's dRush, part of Interpublic Group of Cos., New York; and Stolichnaya's BBDO Worldwide, Chicago, part of Omnicom Group.

No. 2 brewer Miller retrenched from a new-product emphasis in 1996 as it looked to halt the tailspin of its Miller Lite and Miller Genuine Draft. Last year, volume for the Philip Morris Cos. unit fell 5% to 40.5 million barrels, according to Beer Marketer's Insights.

Mr. McGarry said Miller's current product push differs from the 1990's introduction of lines like Red Dog and Icehouse because its spending comes from expanded budgets, rather than siphoned from leading brands. To best the plethora of similar entries crowding shelves this summer, spending will be key. Guinness UDV's Smirnoff Ice likely will receive $50 million in advertising this year, Anheuser-Busch Cos.' Bacardi Silver $60 million, and Mark Anthony Brands's Mike's Hard Lemonade will get about $50 million in marketing.

war of the wealthy

It's unlikely Miller, which laid out $224 million on measured media for all its brands in the first 11 months of last year, according to Taylor Nelson Sofres' CMR, can touch that, said industry experts and people close to the brewer. "This is going to be a war of wealthy marketers," said one competing beer man.

Some observers believe Miller's ability to market three alternative malt beverages might enhance its value for potential buyers-it's said South African Breweries and Scottish & Newcastle are eyeing a Miller purchase (AA, Feb. 4). But Mr. McGarry said Miller's malt policy stems from smart business, not flirtations with suitors, and that Miller waited until now for its malt push because it wanted to ensure the category would survive.

Even if it does flame out, marketers who wait could miss millions. Said one executive familiar with Miller: "If they can garner 2- 3- or 4% of a 200 million barrel market, that's a sizeable amount."

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