Beer Marketer's Insights

MillerCoors’ Deepening Legacy Miller Problems

06-28-2010

MillerCoors quandary on what to do with Miller legacy brands only increasing as time goes on. Miller Legacy brands down 7.9% and 1 full share yr-to-date thru Jun 13 in Symphony IRI food/drug/c-store, while Coors Legacy brands gained 2% and up 0.6 share. But Legacy Miller still 59% of MC volume in scan. Such outsized drops make it very difficult for MC to grow. It’s down 4% overall. Of Legacy Miller’s top 10 brands, which represent 95% of Miller’s scan volume, only MGD 64 is up YTD (3%) and even that declined 3% last 13 weeks. Two biggest quandaries remain 2 biggest Miller premium brands: Lite and Genuine Draft. Their volume down 6.5% and 20% respectively in yr-to-date scan data. Internally, MillerCoors debating what to do about these steep declines, INSIGHTS hears. There has long been a school of thought to price Lite below Coors Light and sandwich Bud Light. But that would come at huge sacrifice of profitability, especially since MC pays 70% of discounts. Tho Lite trend did show notable improvement (down 2.2%) in latest 4 weeks thru Jun 13, it has yet to find its footing, even with massive overhauls of ads and increased media weight. It’s losing share in almost every state, INSIGHTS understands. As for MGD, MC not doing much. MGD down 1.8 mil bbls, 45% last 5 yrs and down to just 2.3 mil bbls, less than 1/3 of peak volume. Legacy Miller portfolio also includes still sizable volume in comparatively weak subpremium equities, especially Mil Best family. Best Light down 15.5%, Best Ice down 4%, and Best itself down 18% YTD thru Jun 13 in SymphonyIRI. Even High Life family has turned negative in 2010, with High Life down 1.6% and High Life Light down 11%. Compare to Keystone Light up 7% YTD in SIRI data.