Miller Eyeing Expanded Rollout of MGD 64

Outperforming in test markets.

Based on MGD 64’s success in test markets, Miller Brewing Company “will seek to roll it out just as fast as we can,” CEO Tom Long said Thursday in a teleconference.

From the Milwaukee Journal Sentinel:

MGD 64 has performed better than expected in recent test marketing, and it could end up as a national brand sooner rather than later, Miller Brewing President Tom Long said Thursday.

"We will seek to roll it out just as fast as we can," Long said during a teleconference discussing financial results posted by London-based SABMiller PLC, Miller Brewing's corporate parent.

"We've really been surprised by the health and growth of MGD 64," Long said.

Miller Earnings Up 27 Percent

Worthmore portfolio grows 49 percent.

Miller Brewing Company’s earnings before interest, taxes and amortization increased 27 percent to $477 million during the year ended March 31, the brewer’s parent reported today.

Revenues grew by 4.8 percent to $5.12 billion.

Miller’s results were driven by growth by Miller Lite, double digit growth by its worthmore portfolio, an industry-leading increase in revenue per barrel, and ongoing cost savings, SABMiller said.

Miller's US domestic sales to retailers (STRs) were up 3.1% when adjusted for one additional trading day against the prior year (up 3.5% unadjusted). Miller’s shipments grew 3.9% on an unadjusted basis, and were up 1.5% on an organic basis (excluding Sparks and Steel Reserve).

Revenue per barrel increased by an industry-leading 4 percent.

Miller Gets U.S. Rights to Grolsch

Bolsters Miller's European import portfolio.

Grolsch and Anheuser-Busch have reached an agreement to transfer the U.S. importing rights for Grolsch to Miller Brewing Company from A-B, A-B and SABMiller plc announced today.

"We are pleased to acquire the U.S. rights to Grolsch, which is a terrific brand steeped in nearly 400 years of heritage," said Miller CEO Tom Long. "With Peroni, Pilsner Urquell and now Grolsch, we will offer some of the best European beers to our customers and consumers."

A-B and Miller are working to finalize and close the deal by August 1. Terms of the deal weren't disclosed.

"A-B was doing a nice job growing Grolsch and we hope to build on their success," says Tom Cardella, executive vice president of sales and distribution for Miller. "Grolsch is a great-tasting beer with an upscale image and nearly 400 years of heritage behind it, so there’s a lot to work with."

The addition of Grolsch gives Miller a well-rounded and differentiated portfolio of European imports.

"Peroni is all about Italian style, sophistication and fashion," Cardella says. "Pilsner is the true beer aficionado’s beer and we believe Grolsch is a sessionable import that can compete very well with likes of Heineken. We do think there is a differentiated platform for each of these brands."

Federal Excise Tax Fight Looming?

Could be on the table in 2009.

WASHINGTON – Miller Brewing Company’s top lobbyist warned distributors gathered here that Washington may look at boosting the federal excise tax in 2009.

The scheduled expiration of the Bush tax cuts and ongoing budget issues “will create a tax fight that we have not seen in this town for over 15 years and will probably produce the largest tax bill and rewriting of the tax code since the days of Ronald Reagan and Dan Rostenkowski,” Timothy Scully told Miller distributors attending the National Beer Wholesalers Association’s legislative conference on Tuesday.

Scully noted that Miller paid more than $700 million in federal excise taxes and the overall industry pays about $4 billion.

Increasing the excise tax would hurt brewers and distributors alike, Scully said:

Any increase in the federal excise tax will make it harder for us as a brewer and you as a wholesaler to continue the necessary investments in our brands. An excise tax increase would pull funds from the advertising or marketing of those brands. Any increase would limit our ability to innovate and grow highly profitable and exciting brands like Chill.

Turnaround for Corona?

Down in supers during latest period. Modelo, Tecate up.

Corona Extra has seen sales slide since a price increase last year. Could a turnaround be on the horizon?

Robert Sands, CEO of Constellation Brands (part owner of Corona importer Crown Imports), said that he's seeing encouraging trends.

Beer Business Daily quotes from Sands' presentation at a Goldman Sachs event:

Anecdotally, although we don't have any of the retail data at this point, Cinco de Mayo looks like it was a great holiday for us. Our people feel that the product has gotten out there, the retailers have gotten back behind it. Going into Cinco de Mayo, as we said, we saw the portfolio return to growth, and therefore we are pretty optimistic that we're going to see growth return to both our business and the import category as we move through this calendar year.

Brew News

Brew Blog's picks of news from the beer business and beyond.

A strong incremental volume gain drove total beer sales in supermarkets up 0.5 percent for the four weeks ended May 3, according to beer sales statistics from Nielsen. Pricing was up 2.5 percent. Anheuser-Bush volume share slipped 0.3 points. Miller Brewing Company share dropped 0.7 points. Coors Brewing Company posted a 0.9 point gain. Imports gained 0.1 points of share and craft share increased by 0.3 points.

What’s in Bud Light Lime?

Hint: Not Bud Light.

Bud Light Lime is named after the best-selling beer in the country. But the resemblance is only label deep.

The base beer in Anheuser-Busch’s new product is not Bud Light, reports Monday’s installment of Beer Business Daily.

From the issue:

Regarding Bud Light Lime, he [a brewmaster cited by BBD] said that “it's not possible to tell precisely what the base it is although we have a guess or two. Not an exact match to any other beer via what we know from routine market sampling,” but that it ain't Bud Light as they have different “hopping schemes.”

Doug Muhleman, A-B’s group VP of brewing operations & technology, AKA chief brewer, told BBD: “We formulated for max refreshment and interaction with lime. It has Bud Light bones. Other than that, Harry, brewmasters don't share their secrets.”

The article notes that Miller Chill is not based on Miller Lite or any other preexisting beer from Miller Brewing Company -- which is true. (And why it’s not called Miller Lite Chill.)

Brew News

Brew Blog's picks of stories from the beer business and beyond.

Wired Magazine takes a look at how some craft brewers are tweaking their recipes in face of higher hops prices. "Ian Ward, president of Brewers Supply Group in Shakopee, Minnesota -- the nation's largest craft brew supplier -- says things are only going to get worse. 'That's the crisis that brewers are finding themselves in,' Ward says. 'They're having to review their recipes. The crisis really hasn't hit hard yet.'" The Appellation Beer Blog has a take here.

Ad Age has a story about Bud Light Lime's alliance with singer Santogold. From the story: "A-B is hoping this musical tie-in works better than its last. The brewer's 2006 decision to link Budweiser Select to a Jay-Z record -- even naming the hip-hop magnate co-brand director -- sold more records than beer. Boosted by beer ads that treated the brand as a product placement in a music video, the album enjoyed a strong launch, while Bud Select sales continued to decline. Today, the once-national brand is only marketed in a limited number of major urban markets."

Brew News

Brew Blog’s picks of stories from the beer business and beyond.

Diageo will build a new Guinness brewery outside Dublin even as it keeps open the famed St. James’s Gate brewery in the heart of the city. It will close breweries in Dundalk and Kilkenny. Reuters.

For the fifth straight day, oil prices have hit a new peak. This time: $126 a barrel. CNBC.

Bud Barley Wine? An Atlanta Journal and Constitution story about A-B’s Cartersvilla, Ga., brewery describes a “special sampling of some new experimental beers from the pilot brewery. Among them, a tasty Irish Red ale, a solid American brown ale and, most astonishingly, a hoppy, high-gravity barley wine-style ale.” Breweries experiment with styles all the time, many of which never come to market. So no telling whether any of these will someday hit store shelves.

Bud Ale: “A New Style of Ale.”

“Distinctly American.”

Budweiser American Ale, due for release in October, will be billed as “a new style of ale.”

That’s the language used on the label, based on filings with the federal government.

The predominantly red label -- which includes an image of the Anheuser-Busch eagle, the A-B compass and hops – bears this legend: “Budweiser American Ale defines a new style of ale – The American Ale – created by Anheuser-Busch brewmasters to deliver robust ale taste that’s full-bodied, but not too heavy nor too bitter.”

The neck ringer further plays up the “American” angle: “Budweiser American Ale. An ale that’s distinctly American in character. Savor the difference.”