Miller Ads Attack Bud Light -- WSJ

MillerCoors' new advertisements come during a slump in sales of light beer

By Tripp Mickle 

Miller Lite is picking a fight with its rival in a new ad campaign that takes direct aim at the nation's top-selling beer: Bud Light.

The 15-second spots, which will debut during NFL games Oct. 2, are a direct counter to new ads that say, "Bud Light: Raise one to right now." The MillerCoors LLC ads go a step further, saying: "Bud Light says raise one to right now so why not raise the right one." Then taking the taunt further, the ads say: "Miller Lite has more taste and half the carbs."

The ads arrive amid a pronounced slump in sales of light beer, the nation's biggest beer category, and aim to stir up passions by reigniting the old beer wars that helped drive category sales in the 2000s.

As drinkers today continue to opt for craft brews and Mexican lagers over light beers, the market share of Anheuser-Busch InBev NV's Bud Light and MillerCoors' Coors Light and Miller Lite have fallen to 32% from a peak of 35.5% in 2007, according to industry tracker Beer Marketer's Insights.

MillerCoors Chief Marketing Officer David Kroll blames Bud Light for the category's decline, saying the brand's sophomoric and celebrity-focused advertising campaigns have failed to explain the benefits of light beer to a new generation of drinkers.

"Bud Light has made light beer seem more immature," he said. "Overall, [this is about] rebuilding respect for Miller Lite but more importantly rebuilding respect for light beer as a segment."

Much of the decline in the light category has stemmed from Bud Light. AB InBev's biggest beer has seen its market share decline to 17% from 19.4% in 2008, according to Beer Marketer's Insights. AB InBev has reported Bud Light sales declines for the past 10 quarters.

In an effort to reverse Bud Light's performance, the Belgian-based brewer this year overhauled its packaging and launched a new ad campaign developed by Wieden + Kennedy that features Seth Rogen and Amy Schumer urging American drinkers to join the Bud Light party.

AB InBev Chief Executive Carlos Brito said in July that consumers "are responding positively" to the campaign and Bud Light purchasing intent had risen. But retail sales of Bud Light were down 2.2% during the important summer selling season, a 12-week period ended Sept. 10, according to Nielsen data cited by Cowen & Co.

"We are never complacent and we continue to work hard to...maintain our [No. 1] spot," said an AB InBev spokeswoman in a statement, noting that Bud Light currently has NFL team logos on cans.

Miller Lite's performance has improved since it returned to its original white packaging and blue logo in 2014. It has gained share of the light beer category for seven quarters by picking up share from Bud Light and others. However, Miller Lite's sales have been flat the past two quarters and declined in the low-single digits last year.

Miller Lite shipment volumes have declined 16% to 13.4 million barrels from 15.9 million in 2010, according to Beer Marketer's Insights.

Miller Lite will try to extend its market share gains with direct attacks on Bud Light while its sister brand, Coors Light, tries to gain share with a separate advertising campaign that casts the beer as refreshing, Mr. Kroll said.

MillerCoors is escalating its pressure on AB InBev as the Belgian-based brewer closes in on its $100 billion-plus takeover of rival SABMiller PLC. Shareholder votes by proxy are due Monday and a shareholder meeting will be held Wednesday.

The deal will reshuffle the U.S. beer landscape, making Molson Coors Brewing Co. the sole owner of MillerCoors. AB InBev has a 44% share of the U.S. market, while MillerCoors has a 25% share.

Directly attacking a rival has been a marketing hallmark for decades. Pepsi chipped away at Coca-Cola's market-leading position in the 1980s with taste-test challenges, and Apple took aim at PCs with its "Get a Mac" ads in the 2000s.

Write to Tripp Mickle at [e-mail]

(END) Dow Jones Newswires

September 26, 2016 02:48 ET (06:48 GMT)

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