MillerCoors Gives in to AGs, Takes Stimulants Out of Sparks
CHICAGO (AdAge.com) -- Bowing to pressure from city and state attorneys general, MillerCoors this morning voluntarily agreed to reformulate Sparks, the best-selling alcoholic energy drink, which will no longer include stimulants such as caffeine and guarana.
The move follows a similar step by Anheuser-Busch earlier this year and could effectively spell the end of the controversial drink segment.
"As a responsible company, we are always willing to listen to societal partners and consider changes to our business to reinforce our commitment to alcohol responsibility," said Tom Long, president-chief commercial officer of MillerCoors. "These changes will allow MillerCoors to continue to market and sell Sparks to legal-drinking-age consumers."
The AGs also got MillerCoors to make changes to a brand-marketing program (ranked as one of Advertising Age's Marketing 50 in 2007) they said was targeted at underage drinkers. In a statement, they said: "MillerCoors has also agreed to cease particular marketing themes that appeal to underage youth, eliminating advertisements that feature a bright-orange-stained tongue and not renewing its contract with William Ocean, an air-guitar champion who does a back flip onto an opened can of Sparks at all of his shows. MillerCoors will also immediately discontinue the Sparks website, which looks like it was created by a college freshman." But the agreement to reformulate Sparks contained no finding that MillerCoors actually did market to youth or behaved illegally.
Miller paid $219 million for Sparks -- and a non-energy-drink brand, Steel Reserve -- in a 2006 transaction, which immediately made it the dominant player in a small but fast-growing category. Brewers such as Miller and A-B, which had less success marketing brands such as Tilt and Bud Extra, were hoping to capitalize on the popularity of caffeinated cocktails such as Red Bull and vodka. But they quickly learned that selling those combinations (reports pointed to by the AGs and activists say they are dangerous because they mask alcohol's effects) premixed is a trickier proposition than letting consumers mix them themselves.
While the beverages' labels and contents were approved by all necessary federal and state authorities, they nevertheless evoked the ire of activists -- led by the Center for Science in the Public Interest -- and the AGs.
In June, the AGs reached a settlement with A-B, which agreed to stop selling the beverages. They then immediately fixed their gaze on Miller, which has a dominant share of the market and the hefty investment in Sparks. Coors, which merged with Miller in the U.S. in July, did not market alcoholic energy drinks.
In September, MillerCoors agreed to postpone the launch of Sparks Red, a higher-alcohol version of the original. And now it's agreed to reformulate all existing Sparks brands to remove stimulants.
In a statement, the AGs praised MillerCoors' decision to reformulate Sparks. San Francisco City Attorney Dennis Herrera said: "MillerCoors is being a responsible industry leader in removing these dangerous products from the market and is taking another important step toward protecting public safety and youth."
The concessions by MillerCoors and A-B have eliminated about 85% of the market for premixed alcoholic energy drinks, the AGs said, and they intend to pursue the smattering of smaller players that make up what's left.