MillerCoors Aims for Mercurial Millennials With New Fruity Brands

Brewer Launching Coconut-, Apple-Flavored Creations Along With 'Third Shift' Lager

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In another sign that beer is no longer about plain old barley and hops, MillerCoors is fueling its innovation pipeline with coconuts, apples and a new amber lager created by the company's brewers during their downtime.

The offerings, which are rolling out this summer, are: Coco Breve, a coconut water-infused clear malt beverage targeting women; Redd's Apple Ale, an apple-flavored beer that 's already sold oversees; and Third Shift, a lager that marks the start of a series of small batch brewer creations that MillerCoors plans to start testing in the mass market.

The brands, which will initially debut regionally, come as MillerCoors and other big brewers search for new products to compete with smaller craft brewers and liquor marketers, which have stolen share from beer thanks in part to new flavorful innovations and newly aggressive advertising.

The goal is to win over millennial consumers, who constantly change their drinking habits in search of variety -- unlike previous generations that were more loyal to certain styles or brands. "These occasions are very fluid," said Sarah Ross, marketing director for innovations at MillerCoors. Even in the course of one night, millennials "might start with a beer and may move into a spirit and maybe move back into a different kind of beer," she said.

Ad Age recently caught up with Ms. Ross to get the scoop on the new products:

Coco Breve will hit stores in selected markets beginning June 1. The beverage, which comes in kiwi lime and mango citrus, is "really our first attempt in quite some time to target women," Ms. Ross said. "We really developed this brand with Whole Foods in mind, in terms of creating a unique and natural product."

At 4.2% alcohol by volume, the brand has about the same alcohol content as a domestic light beer. But most women don't bring beer to "girls' night out," Ms. Ross said. So the brewer is seeking to win them by seizing on the rising popularity of nonalcoholic coconut waters, which have moved into mainstream.

Coca Cola Co., for instance, recently took a majority ownership stake in Zico, a nonalcoholic coconut water that Ad Age named as one of "America's Hottest Brands" in 2009.

"One of the things we always do is watch the nonalcoholic space ... and coconut water was one we definitely saw was popping," Ms. Ross said.

Marketed as "naturally unique" with 15% coconut water, Coco Breve will initially be supported with below-the-line advertising by Publicis Groupe 's Arc Worldwide, a roster shop. The initial rollout targets Los Angeles, Atlanta, Miami, San Diego and Austin, Texas.

Redd's Apple Ale is an apple-flavored ale MillerCoors is positioning to compete with flavored malt beverages such as Mike's Hard and Twisted Tea, which Ms. Ross noted do not come in apple flavors. MillerCoors part-owner SABMiller already sells the brand overseas in markets such as Poland, Russia, Columbia and South Africa, where flavors are tweaked based on local preferences. The U.S. version is sweet -- but not quite as sweet as the Polish version -- with 5% alcohol by volume, targeting men and women, Ms. Ross said.

The brand will launch in July in Central and Southeastern states. Arc is handling below-the-line advertising. But if the brewer decides to make a boarder marketing push, Ms. Ross said the account will move to WPP, which was recently added to the brewers' agency roster in a major shakeup.

Third Shift is formally called "Third Shift Band of Brewers," named for a group of MillerCoors brewers who created it while exprimenting during their downtime at a brewery in Golden, Colo. Company brewers have done this for years, but MillerCoors only recently decided to take their creations to the mass market, Ms. Ross said. "They play around and they experiment and when they get it right and they all love something, they enter it into [contests]," she said.

Third Shift won an award at the 2012 World Beer Cup. It is described as having a "sweet maltiness that dominates slightly over a clean, hop bitterness."

The brew is the first in a series of smaller batch beers that MillerCoors plans to put into the wider market, possibly with marketing featuring the brewing creators -- which would follow a selling tactic successfully used by smaller craft brewers. Still, MillerCoors is not describing Third Shift as a craft brew. Rather, the beer will be priced a bit lower than the average craft in a category MillerCoors is calling "invitation" beers. With a more easy-drinking style than some of the more complex crafts, Third Shift seeks to win drinkers who "want to try something new but they don't have a lot of money in their pockets," Ms. Ross said.

Third Shift also seems positioned to compete in some parts of the country against the similarly styled Yuengling brand, a fast-growing regional brew that moved into Ohio last year in one of the most successful expansions in beer history. Third Shift recently debuted in Dayton, Ohio, with planned launches this summer in parts of Northern California, Nevada and Texas.

Below-the-line marketing is by Integer, a MillerCoors roster shop.

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