Struggling MGD Lightens Up

Miller Brewing's Franchise Hopes 64-Calorie Version Will Fatten Sales

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CHICAGO ( -- Attention, dieters: Now you can drink twice as much light beer for nearly the same amount of calories.
With 64 calories, the new MGD 64 has only a little more than half MGD Light's 110 calories.
With 64 calories, the new MGD 64 has only a little more than half MGD Light's 110 calories.

Miller Brewing Co. is prepping an aggressive regional rollout of a 64-calorie, female-targeted version of Miller Genuine Draft in a move it hopes will revive one of the most moribund franchises in domestic beer. The new line's calorie count is a little more than half MGD Light's 110 calories.

Moving to Midwestern markets
MGD 64, which had been test marketed in Madison, Wis., late last year, sold well enough to persuade Miller executives to greenlight it in major Midwestern markets starting March 1. There, it will be backed by print, radio and outdoor advertising from MGD's agency of record, WPP Group's Y&R, Chicago.

Miller Chief Marketing Officer Randy Ransom said MGD 64 would actually replace MGD Light in the marketplace, and would be aimed at stealing women drinkers from rival brands such as Michelob Ultra, Bud Light and Coors Light. "Basically, this is a new and improved Miller Genuine Draft Light," he said. "It has the lowest calories out there and still tastes like beer."

At 64 calories, the brand is the lowest-calorie mass-marketed domestic beer to date, although Beck's Premier Light, from Belgian beer giant InBev, also hit the 64-calorie level when it debuted in 2005.

By contrast, full-calorie MGD boasts 143 calories. Miller Lite -- which has centered its message on calorie-and-carbohydrate comparisons with Anheuser-Busch's Bud Light of late -- has 96 calories.

A Miller spokesman confirmed that a wider rollout of the brand had been approved, but declined to disclose any details.

In and around health clubs
As for marketing, there will also be a clear focus on placing ads in and around health clubs, executives close to the situation said, noting that the tagline used in the trial market, "As light as it gets," was well-received by women.

Mr. Ransom described the approach to mainstreaming MGD 64 as somewhere between the all-out blitz that accompanied the launch of Miller Chill last year and the more passive discovery model most associated with slow-build brands, such as Coors' Blue Moon. "It's a niche brand with a specialty target," he said. "We want to be very focused and targeted with the media we use for it."

In Chicago, for instance, the media will include RedEye, the Chicago Tribune's youth-targeted tabloid; the glossy, upscale Chicago magazine; a handful of radio music stations and some select outdoor and on-premise work.

Last year's Chill launch was backed by a substantial ad budget in the primarily Southwestern markets where the start-up brew first debuted, and saw a national rollout last summer. Miller Chill's first-year sales are estimated at about 450,000 barrels, which translates into more than a 0.3% market share, a decent showing, considering the brand has been national for less than a year. Miller executives have said their goal is to reach between a 0.5% and 1.0% share by the end of next year.

The new volume provided by Chill provided much-needed growth to a brand portfolio still heavily weighted toward mature brands that are either growing slowly (Miller Lite) or are merely trying to arrest long declines (Miller High Life, MGD).

High Life takes bite out of MGD
But while High Life -- thanks in part to resonant ads starring a burly truck driver "taking back" the brand from stuffy bistros and too-chic grocers -- has managed to slow its losses of late, MGD has failed to reverse its slide. Part of the brand's problem is that High Life's recent "gains" have at least partially come at MGD's expense, according to people familiar with the matter.

Barrel shipments of MGD fell to 3.45 million in 2006 from 4.15 million in 2004, according to Beer Marketer's Insights, and most indications are that trends worsened for the brand during 2007. Overall, MGD Light accounts for slightly less than 10% of MGD's 3.45 million barrels.

According to Information Resources Inc., supermarket sales of regular MGD declined 7% during 2007, while MGD Light sales fell by 10%.

UBS beer industry analyst Kaumil Gajrawala said that while there's some risk in tying the MGD brand to a low-calorie positioning its core drinkers haven't traditionally associated it with, the franchise is so badly in need of a lift that it's a risk worth taking.

"The bottom line is that it will create some excitement in the trade, so it could be the shot in the arm MGD needs," said Mr. Gajrawala, who added that he harbored doubts on whether the launch could salvage MGD's franchise. "It's definitely a long shot."
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