CHICAGO -- MillerCoors LLC said it plans to increase spending on marketing this year and to introduce new packaging for Coors Light to confront a protracted slump in the U.S. brewing industry, reported The Wall Street Journal.
MillerCoors, a joint venture of SABMiller PLC and Molson Coors Brewing Co., will roll out new cans and bottles of Coors Light, its top-selling beer, in the spring. The brew will include an indicator showing drinkers when it has reached a "super cold" temperature, MillerCoors CEO Leo Kiely said, according to the report.
Such packaging [image-nocss] changes have helped lift sales in the past for Coors Light, which is expected to overtake Budweiser as the No. 2-selling beer in the United States this year. Budweiser is made by Anheuser-Busch InBev NV, the leading U.S. brewer. (Bud Light is the No. 1 seller.)
MillerCoors, based in Chicago, will spend more on marketing, Kiely said, but would not offer details, said the report. The brewer spent $295 million on TV and other ads in the first nine months of 2010, according to the report, citing market tracker Kantar Media.
Kiely said U.S. sales of mass-market brews are being hampered by double-digit jobless rates among 21-to-32-year-old men, but that the company is seeing improved demand for Coors Light and Miller Lite after raising prices last fall on its so-called economy brews such as Keystone Light.
Kiely, an 18-year veteran of the industry, called last year "the toughest year I've ever seen in the beer business," said the report. Industry sales volumes fell about 1%, the second straight year of declines.
MillerCoors's fourth-quarter net income increased to $144.2 million from $102.2 million a year earlier. Revenue rose 0.4% to $1.7 billion as the brewer raised prices. Sales to retailers, a key measure of unit volume sales, fell 2.5%, about half the decline in the third quarter.
Separately, Molson Coors reported that net income fell 51%, citing an unusually low tax rate a year earlier and weak demand in Canada and the U.K.
MillerCoors has offset a tough U.S. beer market by wringing huge cost savings from the merger that created the company in 2008, the Journal said.
Kiely said the company will continue to focus on boosting sales of higher-margin specialty beers this year, as well as its flagship light lagers.
The brewer last year created a subsidiary called Tenth & Blake Beer Co. to focus on "craft" brews like Blue Moon and imports. Kiely said the unit is training employees in the finer points of beer in an attempt to create "a beer culture" akin to that of leading craft brewer Boston Beer Co., which makes Samuel Adams.
Tenth & Blake's priority is to foster growth of the company's own specialty beers, but it also will look at forming partnerships with other brewers in the fast-growing craft category, Kiely added. For instance, the company recently agreed to provide financing to help the founders of Georgia craft brewer Terrapin Beer Co. acquire control of the brewery, said the report.
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