E-Malt.com News article: United States: MillerCoors to test-market beer based on pre-Prohibition recipe

MillerCoors LLC plans to test-market a new beer based on a pre-Prohibition recipe, The Wall Street Journal communicated on March, 18.

The new beer is called Batch 19 and makes part of the brewer’s initiatives aimed at bucking up the US market.

As from next month, the new beer will be available in draft in bars and restaurants in Chicago, Milwaukee, San Francisco and Washington, said Peter Swinburn, chief executive of Molson Coors Brewing Co., which co-owns MillerCoors.

According to Mr. Swinburn, Batch 19 - named for the year, 1919, before Prohibition began—is designed to attract consumers looking for "a true, authentic, original beer."

The recipe of Batch 19 was found by Keith Villa, master brewer at MillerCoors, in the archives of Coors Brewing Co. in Golden, Colo. The recipe was used to make one of its beers before alcohol was banned in the U.S. for a 13-year period, Mr. Swinburn said.

"It's the beer that got beer banned," Mr. Swinburn joked.

MillerCoors, a joint venture of Molson Coors and London's SABMiller PLC that was formed in 2008, is rolling out new products and packaging styles amid one of the biggest slumps in demand the industry has faced in years.

Shipments of beer in the U.S. fell about 2% last year. Miller Lite's shipments fell 6.5% and Coors Light's rose 0.8%, according to Beer Marketer's Insights newsletter.

MillerCoors, the second-largest U.S. beer maker by sales after Anheuser-Busch InBev NV, said previously that it would expand to the whole country its $20, refrigerator-friendly draft-beer systems for Miller Lite and Coors Light. It also has said it plans this year to unveil a new type of bottle for Miller Lite that is designed with grooves inside the neck. The new bottle, when poured, will "actually increase the aroma" of the brew and "explode the flavor more," Mr. Swinburn said.

Coors Light has been a bright spot for MillerCoors, but it has struggled to find a way to revive Miller Lite, which has faced declining sales for much of the past decade. "It just takes time given where the brand was," Mr. Swinburn said. "Yes, we're committed to the brand. Yes, we think we'll get it right."

MillerCoors, based in Chicago, is trying to be innovative in a crowded market in which new products have shown a mixed track record. MillerCoors made a hit of MGD 64, a light beer with just 64 calories, and Anheuser did so with Bud Light Lime, a lime-infused version of the nation's top-selling brew. Some other beers, such as lime-and-salt-flavored Miller Chill, have done well initially but then foundered.

Molson Coors has a 42% stake in MillerCoors. Its other big markets are Canada and the U.K. In February, it said its fourth-quarter profit more than doubled to $222.1 million as net sales jumped 11% to $820.8 million. Sales volume in the U.S. and Canada has been down in recent months because of high unemployment and penny-pinching by consumers.

Mr. Swinburn said Molson Coors is seeing some encouraging signs for new products it recently rolled out in Canada, including a 67-calorie version of Molson Canadian, but "it's really, really early."

He also said the beer giant, which has dual headquarters in Montreal and Denver, would consider more acquisitions, but only if they meet stringent criteria, such as adding to Molson Coors's per-share earnings in the short-term.

Mr. Swinburn said the company was encouraged by the growth of Coors Light in China, and might look into buying a brewery in China or starting its own. Coors Light is currently brewed under contract in China by China Resources Snow Breweries, which is 49%-owned by SABMiller.

"We will look to, when the time is right, underpin that volume because it's getting to the stage now where the margin that we would enjoy from producing it ourselves would justify a certain level of capital investment," Mr. Swinburn said. "We've painstakingly built that market over eight years, city by city."

The company sells Coors Light in 42 cities in China and has about 400 employees in the country. Sales of the brand are growing about 30% each year, though off a small base.


19 March, 2010