Brew News

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

Here’s coverage of Molson Coors Brewing Company’s first-quarter earnings from The Wall Street Journal and Bloomberg. Morgan Stanley and Credit Suisse weigh in as well.

Anheuser-Busch's Ascent 54 -- a beer now marketed only in Colorado -- goes national this fall as Michelob Dunkel Weisse, reports the Rocky Mountain News.

Beer Business Daily (subscription required), remarking on Coors’ success with packaging innovation, says: “Here's a prediction: A-B is fast-tracking some package innovations of its own.” Should be interesting to watch whether that develops.

The Greensboro (N.C.) News and Record has an interesting story about craft beer dinners hosted by Foothills Brewing in Winston-Salem.

Brew News

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

Supermarket beer volume fell 0.4 percent during the four weeks ended April 26, according to beer sales statistics from Nielsen. Miller volume share fell 0.5 points while dollar share fell 0.3 points. Anheuser-Busch volume share declined 0.1 points and dollar share dropped 0.4 points. Coors volume and dollar share both increased by 0.8 points. Imports gained 0.1 points of volume share but dollar share slipped by 0.2 points. Craft volume share was up 0.3 points and dollar share was up 0.7 points.

The entry price for a Super Bowl commercial will be $3 million next year, the Wall Street Journal reports. But longtime buyers won’t necessarily have to pay that much. From the story: “Anheuser-Busch, for example, has locked in a rate of about $2 million for each of its spots, according to a person familiar with the matter.”

The St. Louis Post-Dispatch explores the potential impact of an economic slowdown on the beer business.

Coors Sales up 6.6 Percent

Four lead brands post growth.

Coors Brewing Company, the U.S. arm of Molson Coors Brewing Company, posted 6.6 percent growth in sales to retailers during the first quarter.

From the Molson Coors earnings release:

The increase was primarily due to mid-single-digit growth of Coors Light, and double-digit growth by Blue Moon, Keystone Light and Coors Banquet. Each of the Company's four largest U.S. brands, representing more than 93% of its U.S. volume base, achieved accelerated sales and market-share gains in the quarter. The strength of our U.S. portfolio spanned the country, resulting in significant market share gains and sales-to-retail growth in all major channels and in 47 out of 50 states -- and double-digit growth in 15 of these states. Total sales volume to wholesalers grew 7.4 percent. Net sales per barrel increased 3.4 percent in the first quarter, driven primarily by positive net pricing.

Underlying pretax income in the U.S. jumped by 36 percent to $61.9 million.

In the earnings release Molson Coors CEO Leo Kiely said:

"We are very pleased with our first quarter results, which reflect continued strong momentum. Across the board, our teams have remained focused on creating profitable growth by building brands and reducing costs. Based on the strength of our brands, sales execution and cost-reduction initiatives, our U.S. and Canadian businesses once again delivered positive pricing and strong sales-to-retail and bottom-line growth. In the U.K., where challenging conditions still dominate the brewing industry, our team grew overall market share and net pricing."

Coors and Miller Brewing Company, the U.S. arm of SABMiller plc, are parties in a proposed joint venture still subject to regulatory clearance.

The Molson Coors earnings release can be seen here.

Coors to Expand Blue Moon

Pale ale in the pipeline.

After successfully adding a full portfolio of Blue Moon seasonals, Coors Brewing Company is poised to add another line extension.

Coors is getting ready to add a pale ale -- called Pale Moon -- to the family.

From Beer Business Daily, which was covering Coors’ distributor conference:

Lastly, Blue Moon is getting a baby brother, Pale Moon (a pale ale). Pale Moon will launch in several test cities next month and rollout nationally in 2009 if all goes well.

According to a label approved by federal regulators, Pale Moon is billed as a "Belgian-style pale ale."

"Pale Moon is a drinkable pale ale that has a distinctive hop aroma, without the lingering aftertaste," the label says. "This Belgian-Style Pale Ale is brewed with European malts, cascade hops and a touch of hibiscus and orange peel. Thse ingredients create a rich copper colored ale with a flavor complexity that one would expect from the Blue Moon Brewing Company."

SABMiller, Molson Coors Name JV Execs

CFO-, CIO-designates named.

SABMiller plc and Molson Coors Brewing Company named two executives for the proposed MillerCoors joint venture.

Tim Wolf, the chief financial officer of Molson Coors, was named chief integration officer-designate of the JV, which is subject to regulatory approval and expected to close this summer.

Gavin Hattersley, the senior vice president of finance for Miller Brewing Company, was named chief financial officer-designate.

As previously announced, Leo Kiely, current CEO of Molson Coors, will be the CEO of the joint venture, and Tom Long, current CEO of Miller, will serve as President and Chief Commercial Officer.

The press release can be seen here.

Miller, Coors Gain in C-Stores

Bud drags down A-B.

Miller Brewing Company and Coors Brewing Company gained share in convenience stores during the four weeks ended January 26, according to beer sales statistics from Nielsen.

Anheuser-Busch, which dominates the channel with 61.4 percent of case volume, saw its share erode as Budweiser declined.

Miller gained 0.2 points of volume and dollar share during the period. Its gain was driven by Miller Chill, which has held its 0.2 share in C-stores.

Miller also got a boost from the Milwaukee’s Best franchise, which gained 0.1 points of case share.

Molson Coors Beats Wall St. Estimates

U.S. STRs up 6.2 percent.

Powered partly by strong U.S. performance, Molson Coors Brewing Company posted fourth-quarter results that beat analysts’ expectations.

Molson Coors earned 73 cents per diluted share during the quarter, not including one-time items. The analysts consensus predicted earnings of 65 cents per share, according to Bloomberg.

Coors Brewing Company, the brewer’s U.S. arm, posted strong results.

As reported by Beer Marketer’s Insights:

Coors sales-to-retailers up 6.2% in 50 states in 4th qtr, up 5.5% if you include tuff Puerto Rico mkt. Coors led by "mid-single digit growth" for Coors Light, "strong double-digit growth by Blue Moon" and "low double-digit growth" for Keystone Light. Even Coors Banquet "grew at a low double digit rate in the quarter." What's more, Coors Banquet "achieved its first full year of growth in 22 years." Not bad.

Molson Coors CEO Leo Kiely commented on U.S. performance in the earnings release:

"The U.S. business gained market share and increased operating income more than 28 percent during 2007, while overcoming significant cost challenges.”

The Molson Coors release can be seen here.

The Beer Marketer's Insights home page is here.

A Bloomberg story on the earnings can be seen here.

Coors Starts Advertising Blue Moon

Print and outdoor advertising begin.

Coors Brewing Company has nurtured Blue Moon Belgian White Ale into a hot seller through below-the-radar marketing efforts.

Now it’s taking a more conventional route: advertising.

Advertising Age this week reports that Coors recently has been running Blue Moon ads in local weeklies and national magazines, including Food & Wine and Men’s Fitness.

Outdoor advertising has appeared in some “key markets” as well, Ad Age reports.

The ad is an Impressionist-style Blue Moon product shot that includes a glass with an orange garnish. The tag: Artfully crafted.

Integer created the ads. No TV or radio executions are planned. Spending is estimated at the “mid-six-digit level,” Ad Age reports.

Ad Age suggests Coors is shifting strategies because the brand has reached a size where it needs at least some level of media support.

The story can be seen (scroll to bottom) here.

SABMiller, Molson Coors Sign Definitive JV Agreement

Deal expected to close in mid-2008.

SABMiller plc and Molson Coors Brewing Company today announced that they have signed the definitive transaction agreement for the combination of the U.S. and Puerto Rico operations of their respective subsidiaries into MillerCoors LLC.

Graham Mackay, Chief Executive of SABMiller, said, "Today’s announcement is an important step forward towards completing the MillerCoors joint venture, a combination that will ultimately allow us to better meet the needs of distributors, retailers and consumers in the U.S. marketplace by providing greater choice, product availability and increased innovation.”

Leo Kiely, Chief Executive of Molson Coors, said, “This combination of our two highly complementary U.S. businesses creates a stronger brewer and allows us to better compete. We look forward to closing the deal in mid-2008 and are cooperating fully with the regulatory clearance process.”

The transaction is still subject to regulatory clearances.

The deal was first announced in October.

A press release announcing the definitive agreement can be seen here.

Big Packs Driving Coors Light?

Average pack size up 8 percent.

Is Coors Light’s growth being driven by big packs or cans that turn blue?

Coors Light added 0.2 points of case and dollar share at supermarkets during the four weeks ended December 1, according to beer sales statistics from Nielsen.

During that same period, the average pack size of Coors Light sold increased by 8 percent. The only brand to see a bigger increase was Heineken Premium Light.

Brew Blog discussed in October how Coors has been placing increased focus on large packages to help drive Coors Light. For instance, Coors has been placing more promotional focus on 36-pack cans, as shown by increased feature, display and discount support.

And while 30/36 pack cans recently accounted for 19.6 percent of Coors Light’s volume in supermarkets, back in November 2004 they accounted for 15.7 percent, according to beer industry analysis from Nielsen.

Big Thanksgiving for Crafts

Imports regress.

Craft brewers had plenty to be grateful for this past Thanksgiving.

Craft beers gained 0.9 points of volume share in supermarkets for week ended November 24, according to beer sales statistics by Nielsen. They also gained 1.4 dollar share points.

Sam Adams and Coors Brewing Company’s Blue Moon led the way during the holiday, gaining a combined 0.4 volume share points.

The Jacob Leinenkugel Brewing Company (owned by Miller Brewing Company) gained 0.1 points of case and dollar share.

Seasonals -- largely driven by Sam Adams and Blue Moon brands -- also were a big factor in craft growth, according to Nielsen’s beer market analysis.

Fully 87 percent of all measured markets recorded craft beer volume gains.

Living the High Life in C-Stores

Second-fastest growing brand in the channel.

Miller High Life was the second-fastest growing brand in convenience stores for the four weeks ended November 3, according to beer sales statistics from Nielsen.

Miller High Life, driven by advertising featuring the delivery guy played by Windell Middlebrooks, gained 0.4 points of case share and 0.2 points of dollar share during the period.

It’s the 11th straight month in which Miller High Life gained share. And Miller High Life’s growth was widespread, with 52 percent of all measured markets seeing an increase.

Miller High Life’s performance helped boost Miller Brewing Company’s case share and dollar share by 0.4 points. Miller Chill has a 0.2 share in the channel. Steel Reserve picked up 0.2 points.

Anheuser-Busch saw its case share slip by 0.6 points and its dollar share fall by 0.6 points. That’s despite strong performance by Bud Light, which gained 0.6 points of case share and 0.5 points of dollar share.

Coors Brewing Company gained 0.3 points of case share and 0.3 points of dollar share. Coors Light led the way, adding 0.2 points of case share and dollar share.

Coors’ Sales Strong, Margins Soft

Analyst says margins weaker than expected.

Coors Brewing Company, the U.S. arm of Molson Coors Brewing Company, on Tuesday reported strong third quarter sales as all three lead brands posted healthy growth.

But observers have pointed out that margins were relatively soft.

Coors reported a 6.9 percent increase in sales to retailers during the quarter. That was driven by “mid-single-digit growth” by Coors Light, “strong double-digit growth by Blue Moon,” and “low-double-digit growth” by Keystone Light, according to a Molson Coors earning release.

Indeed, long-declining Coors Banquet actually posted its second consecutive quarter of growth.

Commenting on the sales, Beer Marketer’s Insights wrote: “Coors US sales very nearly firing on all cylinders in 3d qtr. … Can’t remember that strong a volume qtr for any big 3 brewer in a very, very long time.”

That said, Coors’ margins -- and, in Canada, Molson’s -- came in below the expectations of UBS analyst Kaumil Gajrawala:

"Both regions however, posted weaker margins; Canada and the US were 50bps and 30bps below our expectations, respectively."

Coors’ shipments to wholesalers increased by 3.4 percent. BMI said this was below its (BMI’s) estimate.

Wrote BMI: “So even tho Coors kept costs in check, up just 1.7% per bbl, its income before taxes (and special items) had modest 8.4% increase to $80.5 million.”

In the Molson Coors earning release detailing the results, Molson Coors CEO Leo Kiely said: “In our two largest markets, the U.S. and Canada, we continued to gain market share on the strength of our strategic brands.”

At 11:58 a.m. eastern time, Molson Coors shares were down 2.10 percent, or $1.19, to $55.35.

The Molson Coors release can be seen here.

The BMI home page is here.

Big Packs Boosting Bud Light, Coors Light

30- and 36-packs gaining share in supers.

Anheuser-Busch and Coors Brewing Company have been placing increased focus on large packages to help drive their flagship light brands in supermarkets, according to beer sales statistics from Nielsen.

According to Nielsen, 30- and 36-pack cans have recorded a 1.8 share point increase in total Bud Light volume over the year-earlier period.

Meanwhile, Coors appears to have placed more promotional focus on 36-pack cans, as evidenced by increased feature, display and discount support.

This is part of a long-running trend. The 30/36 pack cans account for 19.6 percent of Coors Light’s volume in supermarkets today; in November 2004 they accounted for 15.7 percent. For Bud Light, big packs represent 15.9 percent of volume now, compared to 12.5 percent in November 2004.

The shift has been less dramatic with Miller Lite: 9.8 percent now versus 8.6 percent in November 2004.

Big boxes can help drive volume. But they also generally have lower average case prices, so their growth can “pull down” brand-level prices.

Miller, Coors Gain Share in C-stores

A-B decline continues.

Miller Brewing Company and Coors Brewing Company gained volume and dollar share in convenience stores during the four weeks ended October 6, according to beer sales statistics from Nielsen.

Miller gained 0.3 points of case share in supermarkets, thanks to Miller Chill, which carved out a 0.3 point share, and Miller High Life, which added 0.3 points.

Miller’s dollar share also increased by 0.4 points, driven primarily by Miller Chill and Miller High Life.

Coors saw its case share increase by a half point as Coors Light added 0.4 points and the Keystone franchise picked up 0.1 points. Blue Moon was flat.

Coors’ dollar share increased by 0.5 points.

Anheuser-Busch, meanwhile, continued to lose share in the channel.

A-B’s case share slipped by a half-point. Budweiser lost a full point of share. The Bud franchise lost 0.7 points, as a gain by Bud Light (up 0.2 points) wasn’t enough to offset declines by Bud and Bud Select. This marks the 20th time in the past 21 months in which the Bud family has suffered a year-over-year volume share decline.

Meanwhile, A-B lost 0.8 points of dollar share. The Bud franchise saw dollar share slip by 0.9 points as even Bud Light ceded ground, losing a tenth of a point.

A silver lining for A-B: Comps get easier as the year comes to an end.

Bud Light Slows in Supers

Tough comps ahead.

Bud Light failed to gain share in supermarkets during the four-week period ended September 29, according to beer sales statistics from Nielsen.

That’s the second straight four-week period in which Bud Light was flat, according to Nielsen’s beer market analysis.

Thing is, Bud Light benefited from a very easy comparison vs. a year ago, when it lost 0.7 points of share. And tougher comps lie ahead for Bud Light for the remainder of the year (it faces only one more share down comp for the rest of the year).

In all, A-B lost 0.9 points of volume share and 1.1 points of dollar share during the period, according to Nielsen.

Miller Brewing Company picked up 0.3 points of case share during the period, thanks largely to Miller Chill and a 0.1 gain by Miller Lite. It gained 0.5 points of dollar share.

Coors Brewing Company gained 0.8 points of case share during the period, with Coors Light gaining 0.5 points. Dollar share was up 0.6 points.

Transformational?

Would MillerCoors JV change the game?

Will the proposed joint venture between SABMiller plc and Molson Coors Brewing Company’s U.S. and Puerto Rico operations fundamentally alter the competitive landscape of the American beer business?

At the end of the day that’s the biggest question around the creation of MillerCoors, and the one that runs through analyst and media reports about the joint venture (still subject to regulatory approval).

It’s one that won’t be answered for a while. Analysts do view the JV as a long-term negative for Anheuser-Busch, although SABMiller CEO Graham Mackay, quoted by the Financial Times, noted: "I don't think it's realistic to expect the joint venture to get to Anheuser's domestic margins any time soon ... but we expect to make progress."

And there are challenges. Execution risks face any joint venture and provide potential opportunity for competitors.

And A-B will remain, far and away, the industry leader.

But there are plenty of arguments to be made that MillerCoors will make an impact.

As noted by analysts and others, the JV would have greater resources and scale than the companies have on their own – which helps in everything from buying raw materials to distribution to working with retailers. Morgan Stanley analyst William Pecoriello analyst ran down the benefits of this in a Wednesday morning note:

"Miller Coors would have (1) significant funds to reinvest in the market ($500m in synergies), (2) an opportunity to improve the efficiency of its distributor network (who would in turn have the opportunity to reinvest in the business), (3) a catalyst for greater consolidation at the wholesale level, primarily within the Miller - Coors network, which in turn improves the wholesaler economics making a more able competitor, (4) an opportunity to improve the efficacy and the impact of its marketplace investments, (5) leverage a more significant voice at retail, and (6) better align brands vs consumer needs and competitors."

Addressing Miller employees Wednesday morning via a live feed from London, Mackay said scale matters: “The deal will give the business – our business in the U.S. – the scale and the resources to compete. The market is becoming ever more competitive … and we need that scale and need those resources to enable production efficiencies, supply efficiencies and capital capacity utilization that would not be possible for us in our current layout.”

Also, the JV would have a stronger geographic presence than either brewer has on its own. Coors’ strengths in the West and parts of the Northeast complement Miller’s strength in the central part of the country and the Southeast.

And, critically, the JV’s brand portfolio would be well positioned to capitalize on industry trends, such as the continued growth of light beer.

The portfolio also would be poised to capitalize on the premiumization trend. The Jacob Leinenkugel Brewing Company (owned by Miller) and Coors’ Blue Moon brand have benefited from the growth of craft beers. And the combination should help other worthmore brands, including Peroni and Pilsner Urquell.

“When it comes to brands, the joint venture is going to be marvelously placed,” Miller President and CEO Tom Long (who would be president and chief commercial officer under MillerCoors) said during the employee meeting. “Imagine our craft portfolio, imagine our import portfolio, imagine our light portfolio. For all of you who care about brands – and I hope it’s every single of one of you – this is an amazing opportunity.”

Norman Adami, the outgoing President and CEO of SABMiller Americas who led a turnaround of Miller when he arrived in 2003, had no doubt on the meaning of the deal.

“It’s truly a transformational deal, a game-changing deal that is hugely important to our long-term ability to be stronger and even more competitive,” he said at the meeting.

Indeed, the Wall Street Journal quoted a distributor who saw upside in the JV. From the story:

"I think we'll sell more and our costs will go down, so we should benefit," said Phillip Terry, chief executive of Monarch Beverage Co., a big distributor in Indiana selling 15 million cases of beer annually, including both Miller and Molson Coors products. He said he hopes the merger savings will be "translated into additional market spending, more promotions around the brands."

The Financial Times story can be seen here.

The WSJ story can be seen here.

MillerCoors: What They’re Saying

Wall St. reacts favorably to deal. What about A-B?

The creation of the MillerCoors joint venture received favorable reviews on Wall Street.

The combination of Molson Coors Brewing Company and SABMiller plc’s U.S. and Puerto Rico businesses in a joint venture (subject to regulatory approval)is generally seen as a move that will create a company that will operate from a stronger financial position and better compete with Anheuser-Busch.

Wrote UBS analyst Kaumil Gajrawala in a note titled “Able Challengers Get More Able”:

“Benefits of the deal include (in order of importance): 1) increased scale with retailers, distributors, and suppliers; 2) limited overlap between key brands in most markets; 3) cost savings of at least $500m; and 4) better brand ‘portfolio management’ with a focus on high-margin brands.”

Morgan Stanley analyst Bill Pecoriello said:

“We see the implications of a MolsonCoors / SABMiller JV as significant on the US beer (and broader alcohol) industry.(1) marketing dollar effectiveness, (2) improved wholesaler efficiency, and (3) improved voice / effectiveness at retail.”

Bonnie Herzog, an analyst for Citigroup, said:

“The combination of Coors and Miller creates a more rational and stronger No. 2 player in the U.S. market, especially for the pricing environment.”

Benj Steinman, publisher of Beer Marketer’s Insights, observed:

"What's more, combined MillerCoors had 28.5 share in US in 06, compared to AB's 47.9. So theoretically MillerCoors can be a much larger and stronger #2, with lots more resources, a much broader portfolio and a stronger distribution network.”

One big question was what impact the JV would have on A-B.

Harry Schuhmacher, publisher of Beer Business Daily, wrote:

"..the deal also has implications for Anheuser-Bush, which has benefited from its two smaller rivals battling between each other on the sales and marketing levels. They can differentiate Miller Lite and Coors Light based on positioning, price, etc. Now A-B faces a more unified front."

Wrote Morgan Stanley’s Pecoriello:

"As BUD is the largest player in the US beer industry, we see this as incremental negative as we believe that this transaction will create a more able competitor with significant funds for marketplace investment. BUD has already been losing share year to date."

Gajrawala suggested that the deal would be negative in the long term for A-B. But he added that A-B will likely try to take advantage of potential distruptions in the short term.

From his note:

"We believe A-B will be quick to react near term, understanding that they may soon face a substantially more able competitor."

Other observers speculated that the deal might push A-B to pursue a tie-up with InBev. From Herzog’s report:

"We anticipate that this transaction should be more neutral for Anheuser-Busch and could accelerate (its) eventual combination with InBev.”

The BBD home page can be seen here.

The BMI home page can be seen here.

A-B Weighs in on MillerCoors JV

“This joint venture represents an attempt by these companies to better compete against us.”

August Busch IV, the president and CEO of Anheuser-Busch, on Tuesday said in a memo that the MillerCoors joint venture “represents an attempt by these companies to better compete against us.”

The memo, sent to all A-B wholesalers and employees, said: “This new entity does not match our size or portfolio of beers, yet there are undoubtedly synergies that this new company will eventually realize.”

Busch claimed the deal also represents an opportunity for the A-B system. “There will be significant transition confusion from this change, and it’s up to us to capitalize on this disruption now.”

A-B’s drive to bring approved crafts and imports to its distributors leaves it better positioned to handle new competition, Busch said. (Some have called this approach the “funnel strategy.”)

“With our leading core brands, our import alliances, the inclusion of regional craft brewers in our portfolio, as well as the non-alcohol additions to our product offerings, all of which have gained us entry into key accounts and provided leverage for growth, we are an even more formidable opponent today than we were just 12 months ago,” the memo said.

The memo can be seen here.

New Coors CEO Named

Swinburn led Molson Coors’ European and Asian businesses.

Molson Coors Brewing Company has named Peter Swinburn as president and CEO of Coors Brewing Company effective December 1.

From the Molson Coors release:

"Swinburn is currently serving as Chief Executive Officer of Coors Brewers Limited, Molson Coors’ European and Asian business unit. Molson Coors today also named Mark Hunter, currently Chief Commercial Officer of Molson Canada, as CEO of Coors Brewers Limited replacing Swinburn.

“Peter is a seasoned and strong leader, generating significant positive change in our UK business despite an incredibly challenging industry environment,” said Leo Kiely, Chief Executive Officer, Molson Coors. “He has successfully strengthened Coors Brewers through a strong focus on brands, consumer-driven innovations and marketing strategies, cost reduction, and production efficiencies.”

Swinburn succeeds Frits van Paasschen, who left last month to become ceo of the Starwood Hotels.

The Swinburn release can be seen here.

Miller Chill Third-Fastest Growing Beer in C-Stores This Summer

Miller High Life is No. 4.

Miller Chill was the third-fastest growing beer in convenience stores this summer, according to beer sales statistics from Nielsen.

For the 16 weeks ended September 8, Miller Chill racked up 0.3 volume share, according to Nielsen. It scored 0.4 dollar share.

Miller High Life, meanwhile, was the fourth-fastest growing brand, ranked by incremental case volume. During the 16 week period its case volume picked up 9 percent over the year-earlier period.

Five other Miller brands made the top 25 list in C-stores this summer: Steel Reserve (No. 8), Olde English (No. 11), Sparks Plus (No. 14), Miller Lite (No. 21) and Icehouse (No. 24).

Coors Light was the fastest growing beer in C-stores, with its volume up 5.3 percent. Other Coors brands on the top 25 were Keystone Light (No. 5) and Blue Moon (No. 19).

Anheuser-Busch had 10 brands on the top 25 list: Natural Ice (No. 6), Bud Light (No. 9), Bud Light & Clamato (No. 10), Hurricane High Gravity (No. 13), Bud Ice (No. 15), Michelob Ultra (No. 16), Budweiser & Clamato (No. 17), Tilt (No. 18), Bacardi Silver (No. 23) and Landshark (No. 25).

Three Mexican imports cracked the top 25: Modelo Especial (No. 7), Tecate (No. 12) and Dos Equis (No. 22).

Pabst Blue Ribbon came in at No. 20.

Smirnoff Ice came in at No. 2. However, that was driven by the use of previously used UPCs and the renaming of some products to fall into the Smirnoff Ice umbrella.

Coors Gets Nascar Sponsorship

Replaces A-B.

Coors Brewing Company's Coors Light is the official beer sponsor of Nascar effective starting with the 2008 season.

The deal gives Coors Light exclusive rights to Nascar logos in advertising, packaging and promotion as well a the right to name the pole award. It’s a five-year deal.

Anheuser-Busch's Budweiser has been the Nascar beer sponsor since 1999 and it made an offer to extend its relationship, according to a report in Bloomberg.

An industry expert quoted by Bloomberg speculated that Coors spent as much as $25 million.

Stifel Nicolaus analyst Mark Swartzberg said: "Return potential may be unclear, but we think it is difficult not to view NASCAR sponsorship as an exceptionally powerful asset."

The Coors release can be seen here.

The Bloomberg story can be seen here.

Miller Chill Fastest Growing Beer of the Summer

Miller Lite also cracks top 10 list.

Miller Chill was the fastest-growing beer of the summer in supermarkets, according to beer sales statistics from Nielsen.

Miller Chill, which was launched in test markets in February and launched nationally over the course of the summer, moved 896,968 cases in supermarkets during the 13 weeks ended September 8, according to Nielsen.

That amount exceeds the incremental gain of No. 2 Smirnoff Ice by more than 100,000 cases (though there are caveats to Smirnoff Ice’s ranking; see below). Miller Chill’s volume exceeded Bud Light’s incremental gain by more than 370,000 cases, according to Nielsen.

Miller Lite was the 10th fastest growing brand of the summer, in order of incremental volume increase. Its case volume was up 0.9 percent.

Anheuser-Busch had three brands in the top 10: Bud Light at No. 3, Michelob Ultra at No. 4 and Bacardi Silver at No. 9.

Coors Brewing Company also had three brands in the top 10: Coors Light at No. 5, Keystone Light at No. 6, and Blue Moon Belgian White Ale at No. 8.

Femsa’s Tecate was the only import to crack the top 10 list. It came in seventh.

The second-fastest growing brand of the summer was Smirnoff Ice, but that was driven in part by re-issued UPCs and the renaming of some existing products.

Beer Pricing Strong for the Summer

Volume flattish in supermarkets.

Beer pricing showed strength in supermarkets during the summer selling season, according to beer sales statistics from Nielsen.

The national average weighted price for a case of beer in supermarkets increased by 3.6 percent for the 13 weeks ended September 8, according to figures from Nielsen.

Some of that increase was driven by crafts and imports, which boosted prices significantly -- 4.3 percent and 4.6 percent, respectively. Crafts gained 0.7 points of case share during the period while imports were down 0.2 points (due to a -0.3 point decline by Corona Extra).

The three leading domestic light beers saw higher pricing over the summer. The average weighted price for Bud Light was up 1.8 percent. Miller Lite was up 2.4 percent. Coors Light was up 2.5 percent.

Beer volume, meanwhile, grew by 0.1 percent during the period, according to Nielsen. That trend has accelerated recently. Volume was up 2.1 percent during the four weeks ended September 8 and up 1.9 percent for the two-week Labor Day period.

A-B Creating a Blue Moon Fighter?

Files label application for “Shock Top.”

Anheuser-Busch appears to be preparing a beer that it could potentially pit against Coors Brewing Company’s Blue Moon Belgian White Ale.

A-B earlier this month filed a label application with the federal government for Shock Top Belgian White. It’s described on the label as a “Belgian style wheat ale brewed with spices.”

In other words, it sounds similar to Coors’ Blue Moon.

It’s understandable that A-B would want to tap into the success of Blue Moon. The brand, which has gained popularity through word-of-mouth and discovery, has been one of the hottest brands in the beer business.

Rolling out a Belgian white ale would fit in with A-B’s strategy of providing its restricted distributor network with brands in popular niches.

Interestingly, via its arrangement with InBev, A-B also markets the Belgian brew Hoegaarden, billed as the “original white ale.”

(The Jacob Leinenkugel Brewing Company markets Leinie’s Sunset Wheat, which, while not positioned as a Belgian-style ale, is a spiced wheat ale. Miller also markets Henry Weinhard's Summer Wheat, which is being rebranded as Belgian Wheat as it moves from a summer seasonal to a year-round brand, due to popularity of the wheat-beer category.)

The application with the Treasury Department's Alcohol and Tobacco Trade Bureau can be seen here.

Miller, Coors Boost Dollar Share During Labor Day

A-B share slides on weak Bud Light showing.

Miller Brewing Company and Coors Brewing Company both managed to gain dollar share in supermarkets during a two-week Labor Day holiday period that showed solid volume and pricing, according to beer sales statistics from Nielsen.

Anheuser-Busch lost more than a point of dollar share as Bud Light slipped, according to Nielsen.

Overall, the category performed well during the two-week period ended September 8. Volume during the period was up 1.9 percent and weighted average prices were up 4.9 percent, according to Nielsen.

Miller’s dollar share increased by 0.3 points during the period, according to Nielsen. That was driven by the rollout of Miller Chill -- which achieved 1 percent dollar share -- and a 0.2 point gain by the Leinenkugel’s franchise.

While Miller’s dollar share increased, case share dipped by 0.1 points. Miller Lite’s case share slipped by 0.2 points but its average weighted case pricing -- up 4 percent -- was the strongest of the leading domestic lights.

Coors, meanwhile, increased dollar share by 0.5 points during the period. Coors Light and Blue Moon each increased share by 0.2 points. Keystone Light increased share by 0.1 points.

Coors’ case share increased by 0.7 points. That was driven primarily by Coors Light, up 0.3 points.

A-B’s dollar share slid by 1.4 points, according to Nielsen. The Bud franchise slid by 1.4 points, with Budweiser down 0.8 points, Bud Light down 0.4 points, and Bud Select down 0.3 points.

The brewer’s case share slid by a full point, according to Nielsen.

Craft beer continued its run, with case share up 0.8 points and dollar share up by 1.1 points.

Imports showed renewed strength, with case share up 0.5 points and dollar share up 0.6 points.

Is Coors Preparing an Import?

Files label application for new brew Maclachlan’s.

Is Coors Brewing Company preparing an import as part of its announced push into higher-end brands?

Coors European Properties GmbH, a related company, earlier this summer filed a trademark application with the U.S. Patent and Trademark Office for a beer called Maclachlan’s.

That brew was launched this past May in Scotland by Coors’ sibling Carling. It’s a dark beer that goes head to head with the likes of John Smith’s.

The trademark application was submitted under a filing basis that means “the applicant declares it has a bona fide intention to use or use through the applicant’s related company or licensee the mark in commerce or in connection with the identified goods and/or services.”

Just because a company files a trademark application doesn’t mean it will launch a new product. But an import such as Maclachlan’s would fit in with Coors’ recently announced high-end beer incubation group. The goal of that group is to introduce new brews through a slow build -- similar to the approach used to grow Blue Moon.

Apart from the Molson brands, Coors currently doesn’t market a true import in the U.S. Its Killian’s Irish Red is brewed in the U.S.

Coverage from the newspaper the Scotsman about Maclachlan’s can be seen here.

The trademark application can be seen here.

Previous Brew Blog coverage about Coors’ high end incubation unit can be seen here.

What Next at Coors?

CEO van Paaschen’s resignation raises questions.

Frits van Paasschen successfully got Coors Brewing Company back on track after several year of declining sales and marketing drift.

Now that he’s left the company to take the top post at Starwood Hotels, some obvious questions pop up.

1. Will Coors replace him – and how long will that take?

2. Will Coors lead to any change in Coors’ overall strategy of focusing on three brands?

3. Will Coors change its brand strategies?

Beer Marketer’s Insights Express on Tuesday, in exploring “what’s next,” raised this point:

"Leo retakes reins as Coors prexy on interim basis, while also retaining Molson Coors ceo role. Tho Coors has momentum right now and Leo already ran Coors for many yrs, the more time he devotes to running Coors now, the less he has for Molson Coors and vice versa. Filling this position has to be key priority as does succession planning."

Beer Business Daily on Wednesday got distributor feedback to van Paasschen’s departure. BBD said: “Most are sorry to see Frits go, but are confident in Leo’s proven abilities.”

Here was the reaction of one Coors distributor, as told to BBD:

“He will be missed but hopefully they will find somebody to fill the role that Frits had done such a good job at!”

As with other questions, time will tell.

The Beer Marketer's Insights home page is here.

The Beer Business Daily home page is here.

Coors Loses Change Agent

van Paasschen helped get Coors back on track.

Frits van Paasschen heated up Coors Brewing Company’s performance by focusing on cold.

Van Paasschen, who resigned as CEO of Coors last week to take the top job at Starwood Hotels, faced a tough job when he joined the country’s third-largest brewer in March 2005.

Coors Light, the brewer’s biggest brand, had been posting sluggish growth or declining since 2001. The brewer’s low-carb beer Aspen Edge fizzled. Wholesalers were unhappy about the performance of Coors Light and inconsistent marketing.

Coors “has their work cut out for them” one beverage industry consultant told Advertising Age when it was first reported in May 2004 that Coors was searching for someone to lead its U.S. business.

Under Van Paasschen Coors brought a disciplined focus to the company’s sales and marketing strategy. It focused on three core brands and created specific positioning for each of them.

“Cold refreshment,” expressed through advertising and packaging innovation, became the theme for Coors Light (Coors had started down this path in September 2004, before Van Paasschen’s arrival). The brewer focused on “smooth” messaging for Keystone Light. And it developed its craft-style brand, Blue Moon Belgian White Ale.

After suffering declines in 2003 and 2004, Coors Light posted sales increases in 2005 and 2006.

Says analyst Kaumil Gajrawala, an analyst for UBS:

We view Frits van Paasschen’s departure as an incremental negative for TAP, but are maintaining our Buy rating. Van Paasschen’s arrival at Coors shortly after the merger marked the beginning of a multi-year turnaround, resulting in nine straight quarters of growth and share gains. We believe the business can sustain its momentum, predicated on its salesforce/GM structure and consistent marketing message.

Coors CEO Resigns

Taking job outside industry.

Frits van Paasschen, the CEO of Coors Brewing Company, is leaving the brewer to take a job outside of the beer industry, according to news reports citing an internal memo.

From the Wall Street Journal Online:

"Leo Kiely, the CEO of Molson Coors, said in a message to employees that he will assume Mr. van Paasschen's duties until a successor is named. Mr. van Paasschen has helped Molson Coors boost profits and sales, including re-igniting growth for Coors Light, the company's best-selling beer. Mr. Kiely did not disclose Mr. van Paasschen's new job."

Beer Business Daily also reported on the departure and quoted from the memo:

"Over the past two years, Frits and his team have made a real difference in growing our brands, improving productivity, building strong relationships with each of you, and strengthening the great tradition of a values-driven culture at Coors. It is a Winning Formula that we will continue to build on going forward.

"Effective immediately, I will join the team and assume the duties of chief executive of the Coors Brewing Company team along with my Molson Coors corporate responsibilities until a successor is named. Pete Coors will continue his role as executive chairman of Coors Brewing Company. Pete will remain very close to the organization and be available on a day-to-day basis to consult with us on any issues or opportunities. We have an exceptionally talented leadership team and Pete and I are confident in our ability to keep the positive momentum going as we round out one of our most successful peak selling seasons ever."

The Wall Street Journal story can be seen here.

The Beer Business Daily home page is here.

Low-Cal Blue Moon?

AP asks brewer a question.

Brew Blog recently asked whether Coors Brewing Company planned to introduce a light version of its popular craft-style Blue Moon Belgian White Ale.

The question was sparked by the fact Coors recently filed trademark applications for Pale Moon and Pale Moon Light. The similarity of the names to Blue Moon suggests they could be low-calorie versions of the brew. A light version would fit in with Coors’ desire to expand the franchise -- it’s already rolled out seasonal varieties -- and the growth of the worthmore light beer category.

The Associated Press recently conducted a question and answer with Coors brewmaster Keith Villa and asked whether the brewer planned develop a light version of Blue Moon.

He didn’t directly answer the question. Here’s his response:

“A: I always like to experiment and try to make new beers. One that we've won a medal with last year at the Great American Beer Festival was a nice light, drinkable beer I designed to taste like champagne. It was made with wheat and chardonnay grapes. The net result was this really nice beer that didn't smell or taste at all like beer.”

The beer he was describing, by the way, would be Blue Moon Chardonnay Blonde. It won a silver medal in the Fruit and Vegetable Category at the GABF.

While it remains unclear whether Coors will roll out a low-calorie version Blue Moon -- trademark applications don’t always mean a product will come out --- it bears watching.

The AP story can be seen here.

Previous Brew Blog coverage can be seen here.

Bud Pricing Lags in Supers

Increases little more than a third of category average.

Budweiser is not the king of pricing.

The national weighted average case price increase for the Bud franchise in supermarkets was a little more than a third of the category average during the four weeks ended August 4, according to beer sales statistics from Nielsen.

The Bud franchise was up 1.3 percent vs. the category average of 3.5 percent, according to beer market analysis by Nielsen.

Bud was up 1.3 percent. Bud Light and Bud Select each were up 1.1 percent.

Of the three, Bud Light was the only brand to gain case share, up 0.6 points. Bud lost 0.4 points and Bud Select lost 0.3 points, according to Nielsen.

The 3.5 percent increase was driven primarily by increases in import and craft pricing. Import pricing was up 4.7 percent and craft pricing was up 4.3 percent. Also boosting the average category price: The growing size of craft, which picked up 0.7 points of case share during the period.

Miller Lite’s average weighted case price was up 1.7 percent and the brand picked up 0.2 points of case share, according to Nielsen. Coors Light’s case price was up 2.5 percent as the brand gained 0.1 points of case share.

Will Coors Revive – Again – Herman Joseph’s?

Potential effort to tap popularity of craft?

Could Coors Brewing Company be bringing back a beer that’s been launched and discontinued twice before?

The brewer has filed a trademark application for Herman Joseph’s, described in the application as a beer.

Beer industry vets with good memories may recall that Coors launched Herman Joseph’s – named in honor of Coors co-founder Adolph Herman Joseph Coors –as a superpremium ale back in 1980. It was discontinued due to weak sales in 1989.

Coors relaunched the brew in 1995 as craft beers took off.

From a Coors press release issued in November 1995:

"Herman Joseph's -- or HJ -- was a great beer, but was in market ahead of its time. In the 80s, popular-priced and light beers were the rage. Now, the market has come full circle with consumer demand for above-premium beers soaring," said Jon Runge, director, New Product Development. "This has created a new and viable market for HJ. Our distributors, retailers and consumers have been saying we never should have stopped making HJ. Coors is excited to be reintroducing Herman Joseph's."

Coors pulled the beer out of the market after a few years. Coors CEO Leo Kiely in September in 1999 told Modern Brewery Age:

“We pulled that back out of the market. It's a great beer, but it was hard to figure out how to market it. Today that business is largely imports, and import look-alikes and craft beers. I'm not sure where we'll participate, but we will participate. It may be an off-shoot of some of the stuff we do around the world, it may be a continuation for the Killian's work we've done. We've got a wonderful product in Blue Moon, and the Belgian White is growing very nicely in a hugely cluttered category. It will take a couple of years for that clutter to dissipate. It takes brands a long time to die.”

Kiely has been proven prescient on Blue Moon. And it’s worth noting that now, as in the mid-1990s, craft and higher-priced beers are booming.

The trademark application begs the question whether Coors thinks it might be able to replicate its success with Blue Moon with a new brand – and whether three time’s a charm for Herman Joseph’s.

The trademark application can be seen here.

The Modern Brewery Age homepage is here.

NFL Coach Blowup to be in Coors Ad?

Coors using Dennis Green footage, report says.

Coors Brewing Company will use old press conference footage of former National Football League coach Dennis Green in advertising this fall, according to a report in Advertising Age

The big question is whether the brewer will use shots from Green’s fiery press conference last year after his Arizona Cardinals gave up a big lead to lose to the Chicago Bears.

Two ads have been created featuring footage from other, more mild press conferences. But so far no word on whether the big blowup will show up in an ad.

From Ad Age:

"The problem, according to people familiar with the matter, is that Mr. Green's anger after the Monday night meltdown was so pyrotechnic that Coors and longtime agency DraftFCB are having a hard time crafting it into an ad that will pass the collective muster of Coors Chief Marketing Officer Andrew England, the NFL (which has veto power over ads as part of Coors' sponsorship agreement), and Mr. Green himself."

The Ad Age story can be seen here.

Coors Posts Robust Quarter

Shipments, STRs up.

Molson Coors Brewing Company reported solid second quarter earnings marked by growth in shipments and sales to retailers in the U.S.

Shipments to wholesalers in the U.S. grew at a 3.1 percent clip during the quarter. STRs grew by 2 percent (1.6 percent including Puerto Rico).

Morgan Stanley analyst William Pecoriello noted shipment growth exceeded his forecast of a 2 percent increase. STRs lagged his 3 percent estimate.

Coors’ U.S. results were driven by low-single digit growth by Coors Light, double-digit growth by Blue Moon and mid-single-digit growth by Keystone Light.

U.S. pretax income grew 39.1 percent to $98.1 million, excluding special charges a year ago. Sales volume growth, higher net pricing, and cost savings, including merger-related synergies, accounted for the increase.

In Canada, Molson Coors’ STRs were up 1.1 percent and shipments grew by 4 percent.

Earnings from continuing operations increased to 1.94 per share from 1.40 per share, beating Wall Street estimates.

The stock was up 0.31 percent, or by 29 cents, at 11:50 a.m. EST.

See the Molson Coors earnings release here.

Miller, Coors Gain Share in C-Stores

Bud Light slips.

Miller Brewing Company continued its winning streak in C-stores through mid-July as it increased share by 0.3 points, according to beer sales statistics from Nielsen.

Miller’s gain was driven by Miller High Life’s continued growth in the channel.

Miller High Life increased its share by 0.3 share points during the four weeks ended July 14, according to Nielsen.

Miller Chill also helped boost Miller’s share. With only 53 percent national distribution in the channel, Miller Chill secured 0.2 percent share.

Miller Lite was flat during the period.

Meanwhile, Anheuser-Busch continued to lose share in a channel it has long dominated. The brewer’s share slipped by 0.9 points. That was driven largely by a 0.9 share point loss by the Budweiser franchise as all three lead brands – including Bud Light – lost share.

Bud Light lost 0.1 share points.

Coors Brewing Company’s share increased 0.4 share points, as Coors Light, Keystone Light and Blue Moon all grew.

Is Coors Making A Low-Cal Blue Moon?

Files trademark application for “Pale Moon Light.”

Is Coors Brewing Company looking to roll out a light version of its popular Blue Moon craft-style beer?

Filings with the U.S. Patent and Trademark Office suggest it might be.

The brewer last month filed trademark applications for “Pale Moon” and “Pale Moon Light.” The similarity of the names suggests they could be low-cal versions of Blue Moon.

That said, it’s important to remember that a trademark filing doesn't always result in a new product.

If Coors does roll out a light version of Blue Moon, it would fit in with a broader trend of brewers introducing worthmore light beers. Heineken USA last year made a splash with Heineken Premium Light. Boston Beer Co. has been ramping up marketing support for Sam Adams Light. Miller Brewing Company rolled out Miller Chill earlier this year as a trade-up, worthmore light beer.

Such an offering would fit in with Coors efforts to extend the Blue Moon brand as well. Coors has a full lineup of Blue Moon seasonals.

The challenge for Coors, however, is building the brand without making it appear to be big brewer product.

To read a Brandweek story with an anecdote about Coors walking that line, click here.

To see a copy of the Pale Moon trademark application, click here.

To see a copy of the Pale Moon Light trademark application, click here.

Miller, Coors Gain During July 4th Holiday

A-B loses share in supers as Bud, Bud Select decline.

Miller Brewing Company and Coors Brewing Company gained case and dollar share in supermarkets during the three-week Independence Day holiday period, according to beer sales statistics from Nielsen.

Anheuser-Busch lost share as a strong performance by Bud Light couldn’t offset declines by Budweiser and Bud Select, according to Nielsen.

Miller’s case share in supermarkets increased by four-tenths of a point during the three-week period ended July 14. Leading the way was Miller Lite, which gained two-tenths of a point. Miller Lite was helped by strong baseline (non-promotional) trends, improved retail execution and growth in more than three-quarters of measured markets.

Recently launched Miller Chill, available in 62 percent of measured stores during the period, secured a half point of case share in supers, according to Nielsen. That makes it tied with Heineken Premium Light, which had broader distribution during the period.

The Leinenkugels franchise, driven partly by the new seasonal Summer Shandy, picked up a tenth of a point of case share.

Miller’s dollar share grew by a half point during the period.

Meanwhile, Coors’ case share grew by four-tenths of a point, as Coors Light , Blue Moon and the Keystone franchise grew. Coors’ dollar share was up three tenths of a point.

Bud Light gained four tenths of a point of case share (and a tenth of a point of dollar share), but that wasn’t enough to overcome declines by Bud and Bud Select. Bud lost four tenths of a point of case share and Bud Select lost three tenths of a point during the period.

Overall, A-B lost three tenths of point of case share during the period and seven-tenths of a point of dollar share.

On the pricing front, Miller Lite led Bud Light and Coors Light. Miller Lite’s national average weighted case price was up 1.8 percent in supers during the period. Bud Light was up 1.5 percent and Coors Light was up 1.7 percent.

Miller Gains Share During July 4th Week

Miller Lite, Chill drive gains.

Miller Brewing Company gained share in supermarkets during the week ended July 7 thanks to the performance of Miller Lite and Miller Chill.

Miller Lite picked up two tenths of a point of case share during the period.

Newly launched Miller Chill, available in 63 percent of measured supermarkets, secured a half point of share during the period.

Overall, Miller gained six-tenths of a point of share during the week period. Anheuser-Busch’s share dropped by eight-tenths of a point as the Budweiser family lost a full point of share (Bud Light lost a tenth of a point). Coors Brewing Company, meanwhile, gained an eighth of a point of share.

Category volume was down 2.3 percent in supermarkets during the week..

For the longer four-week period ended July 7, Miller gained a third of a point of share. Miller Lite added a tenth of a point of share, helped by broad-based gains and an increase in baseline (non-promotional) volume.

During that four-week period, A-B’s share slipped by two-tenths of a point and Coors’ share increased by three tenths of a point.

Because the Fourth fell during the middle of the week this year, it’s difficult to get a read on how the category did during the holiday period. Some suppliers are looking at a three-week period to assess performance.

A-B Pricing Soft Going into the Summer?

Brewer lags Miller, Coors on pricing in supers during Memorial Day period.

Ever since Anheuser-Busch reset prices to fend off gains by Miller Lite, a big question has been whether A-B would again resort to pricing action to boost volume and share.

That question appears worth revisiting in wake of the Memorial Day.

During the two weeks ended June 2, A-B’s Budweiser franchise significantly lagged Miller Lite and Coors Light on pricing in supermarkets, according to beer sales statistics from Nielsen. During the period, Miller Lite’s weighted average case price was up 2.1 percent and Coors Light’s was up 2.8 percent.

The average weighted case prices for Budweiser and Bud Light, meanwhile, were practically flat, up only 0.7 percent. Bud Select was up only 0.8 percent.

Likely helped by soft pricing -- not to mention near-record levels of promotional execution and exceptional feature and display activity -- Bud Light “won” the two-week holiday period. A-B, despite concerns it’s getting distracted by new initiatives, clearly knows how to “stack ‘em high and watch ‘em fly.”

Bud Light gained nine-tenths of a point of case share during the period, according to Nielsen. Its dollar share increased by four tenths of a point of share.

Coors Light gained a tenth of a point.

Miller Lite lost a tenth of a point of case share in supermarkets. During the four weeks ended June 2, it gained a tenth of a point of share in supermarkets, however.

Miller’s share loss was driven by declines in a few key markets. Miller recorded share gains in most of its measured markets.

Despite the soft supermarket performance during the Memorial Day period, Miller’s total business -- including Miller Lite -- was up during the month of May.

High Life Rocking in C-Stores

Biggest share gainer in channel so far this year.

Miller High Life is leading all other beer brands in gaining case share in convenience stores so far this year, according to figures from Nielsen.

Miller High Life, which has racked up five consecutive months of share growth, has added three-tenths of a point of share year-to-date through May 19, according to beer sales statistics from Nielsen.

Miller High Life comes in second in terms of volume growth, behind only Bud Light, according to beer market analysis by Nielsen. Miller’s Steel Reserve comes in third by this measure. (Other Miller brands cracking the top 25: Sparks Plus, Olde English 800 and Icehouse.)

Driven by Miller High Life’s performance, Miller gained two tenths of a point of share in convenience stores for the four-week period ended May 19. Miller High LIfe grew in more than half of all measured markets during the period.

Anheuser-Busch, despite the growth of Bud Light, continues to suffer in a channel it has long dominated. It lost 1.2 points of case share during the four-week period, driven by weakness in Budweiser and Bud Select, and lost 1.6 points of dollar share.

Coors Brewing Company, meanwhile, gained half a point of case share during the period.

Miller Continues Making Inroads in C-Stores

Miller High Life leading.

Miller Brewing Company recently racked up its fourth straight month of share growth in convenience stores, a channel that’s long been a stronghold of Anheuser-Busch.

Miller gained a tenth of a point of share for the four-week period ended April 21, according to beer sales statistics from Nielsen. That was driven by a two-tenths of a point increase by Miller High Life. Steel Reserve also racked up a two-tenths of a point increase during the period.

Anheuser-Busch -- which dominates the channel with 62 percent share -- lost a full point of share during the period. While Bud Light gained seven-tenths of a point of share, that couldn’t overcome losses by other brands. A-B’s two lead economy franchises, Busch and Natural Light, combined lost a point of share.

It’s worth noting that A-B faces tough year-over-year comps going into the summer.

Coors Brewing Company also gained share during the period and has gone 12 months without a year-over-year share loss in the channel.

Beer Fragmenting in Supermarkets

Bud leads the way as top 20 brands lose share.

The fragmentation of the beer category is well underway in supermarkets, according to figures from Nielsen.

For the 13 weeks ended April 28, the top 20 beer brands commanded 72.3 percent of supermarket volume, according to beer sales statistics from Nielsen. That’s down a point and a half from 73.8 percent share in 20004.

The single biggest driver of that decline is Budweiser, according to Nielsen’s beer industry analysis. Bud accounted for 42.8 percent of the total decline. Michelob Ultra, another Anheuser-Busch beer, represented 22.1 percent of the drop.

Besides the long running decline of Bud, another factor in this fragmentation is the growth of import and craft brands. Indeed, imports have increased their shelf presence by 15.5 percent since 20004 and crafts by 38 percent over the past two years, according to Nielsen.

Clearly, the drivers for the beer business remain big brands such as Bud Light, Miller Lite and Coors Light. And retailers should maintain focus on these brands commensurate with their contribution.

But these numbers also demonstrate how worthmore brands are expanding their presence at retail.

That’s why Anheuser-Busch has embarked on the funnel strategy to give its restricted distributors access to imports and crafts. It’s why Molson Coors Brewing Company has been expanding distribution of Blue Moon.

And it’s why Miller has been expanding distribution of the Leinenkugel’s craft brand and the imports Peroni Nastro Azzurro and Pilsner Urquell. It’s also why Miller sees opportunity for niche import brands including Aguila, Cristal, Cusquena and Tyskie.

Molson Coors Posts 1st Quarter Profit

Beats forecast.

Molson Coors Brewing Company posted a profit in the first quarter of 2007, thanks to cost-cutting and stronger sales, after posting a loss in the year-earlier period.

For the quarter, Molson Coors earned 28 cents per diluted share from continuing operations, excluding special items, according to the company’s earnings release. That compares to a penny loss in the year-earlier period.

The Wall Street analyst consensus was 24 cents per share. Part of the difference -- about 2 cents according to analysts -- was driven by a lower than expected tax rate.

The U.S. business saw sales-to-retailers increase by 2.9 percent, driven by low-single-digit increases in Coors Light and double-digit increases by Keystone Light and Blue Moon, according to the release. Shipments increased by 4.9 percent. The unit posted $45.2 million in pretax income, up 23.1 percent from the year earlier period after excluding special charges.

Molson Coors’ Canada segment’s posted a 1.2 percent increase in sales to retail due to “strong growth” by Coors Light, Rickard’s, Carling and import brands. This growth was “partially offset” by a decline in other premium, discount and unsupported brands. Excluding special items, the unit’s earnings were flat at $45.3 million.

In the release, Molson Coors CEO Leo Kiely said: "Looking ahead, we are pleased with the momentum of our strategic brands as we prepare for this year's peak beer season. We believe our teams can build on that momentum and win the summer, while we make even more progress building great brands and reducing costs to fuel the investments we need to become a top-performing global brewer."

While calling Molson Coors’ earnings “broadly in-line,” Morgan Stanley analyst Bill Pecoriello noted that profits for the U.S. and Canada were “lighter” than his forecast.

He wrote:

"Net net, the quarter was fairly in-line with consensus, especially when quarterly volatility and lack of guidance is considered. Volume growth was stronger than expected in the US, slightly weaker in the Canada and the UK, with higher COGS in Canada , lower rev/barrel and higher MG&A in the US the major variances vs our forecast."

Mark Swartzberg, analyst for Stifel Nicolaus, said in a report that “we believe the company is demonstrating increasing effectiveness driving solid performance in each region while getting the benefits of geographic diversification.”

The release can be seen here.

Molson Coors Sees $250 Million in Savings

Questions about topline growth remain.

Molson Coors Brewing Company told analysts yesterday that it had identified $250 million in cost savings over the next three years.

The savings will come from across the enterprise and reflect the brewer finding less expensive ways to make and deliver beer.

Morgan Stanley analyst Bill Pecoriello upped the company's stock price target to $94 from $89. He bumped up the 2007 earnings per share target to $5.35 from $5.27.

Bear Stearns analyst Carlos Laboy said Molson Coors appears to have found its footing since the merger creating the company two years ago. But while the U.S. business looks solid, he said questions remain about topline growth in two markets, Canada and the UK.

"Competitive headwinds in two of TAP's core markets remain our greatest concern. Molson Canada, TAP's most important strategic asset, lost 0.7 share points in 2006 and we are always wary when a leader gives up share, the leadership position, or both. Although the trends on Coors Light are promising, we believe protecting market share will only get more difficult with Labatt's acquisition of Lakeport."

At 3:24 PM EST the stock was down .9 percent to $85.90.

The Fight for Light

Battle now goes beyond A-B, Miller and Coors.

Miller Brewing Company is positioning Miller Lite as “The Ultimate Light Beer” at a time when the category is at a crossroads.

A growing number of import and craft beer marketers are ramping up marketing spending behind light beers in an effort to tap into the biggest segment of the domestic beer business.

The latest issue of Brew magazine takes an in-depth look at the new competitive battle shaping up in the light category.

From the issue:

It’s taken a few decades, but import and craft beer marketers are getting serious about light beer.

The rollout of Heineken Premium Light last year was the biggest – and most successful – light beer launch yet by an importer. Reportedly backed with tens of millions in marketing support, the brand swiftly gained distribution and sales.

Now, the deluge. Tecate Light is rolling out. Boston Beer Company is increasing its support for Sam Adams Light. Labatt USA is emphasizing Labatt Blue Light. And that’s just for starters.

This about-face by import and craft marketers underscores the central fact of the U.S. beer business: Light beer is the industry’s biggest category and it’s going to get bigger. And any brewer wanting to grow needs a piece of that business.

Light is the biggest fight in the beer business.

“It’s obviously one of the major battlegrounds for the future,” says Benj Steinman, publisher of Beer Marketer’s Insights. Major domestic brewers “own that turf and they don’t want to give that up.”

How important is light? Consider these statistics:

* Light beer – including imports and crafts – represented half of all beer shipments in 2005, according to figures from Beer Marketer’s Insights.

* From 2000 to 2005, mainstream light beer was the biggest single source of growth in the beer industry, according to Beer Marketer’s Insights. Light added 14.2 million barrels of volume in that time – twice the incremental volume of imports and crafts.
* Bear Stearns estimates that, based on current trends, light beer should be 53 percent of the industry in five years and 55 percent in 10 years.

Anheuser-Busch, Miller Brewing Company and Coors Brewing Company recognized the opportunity in light 30 years ago and have been fighting tooth and nail for share ever since.

The new entrants will make the competition even tougher.

To see the whole issue, click here to read it in PDF form.

To receive a free subscription to the print version of Brew, drop a line here.

To read more about "The Ultimate Light Beer" positioning, go here<