Miller to Launch Craft-Style Beer

MILWAUKEE (AP) - Craft beer by its definition is small, both in
batches and distribution. So, what does it mean when the nation's
second biggest brewer takes its most popular beer and does it up,
craft-style?
It's confusing, analysts say, but it makes sense for a company
like Miller Brewing Co. as it woos today's drinker, who wants more
flavorful brews. It also makes sense from a money standpoint
because craft beers are growing faster than the overall beer
segment, and they command higher prices.
Miller, hoping to latch on to part of that growth, announced
this week it's introducing a trio of different styles of Miller
Lite, which it hopes will lure new drinkers to the craft segment.
The Miller Lite Brewing Collection, which will be nationwide by
September, features variations on the brewer's biggest brand:
wheat, amber and blonde ale styles, all popular among craft
brewers.
Tests in February in four markets - Baltimore, Charlotte, N.C.,
Minneapolis and San Diego - were so well received the
Milwaukee-based unit of SABMiller PLC decided to go national.
The goal, Miller spokesman Julian Green said Thursday, is to
bank on the popularity of low-calorie Miller Lite to create a new
market called "craft-style light." The collection's tag line:
"Craft Beer. Done Lite."
But is it? It's not clear how drinkers will perceive this new
twist on Miller Lite, said Eric Shepard, executive editor of trade
publication Beer Marketer's Insights.
"The point of craft beer is more flavorful, so light craft
doesn't make a whole lot of intuitive sense to me," he said.
But he's quick to point out that craft beers continue to outpace
domestic ones, growing 12 percent the past two years compared with
domestics' growth of about 2 percent. That means brewers are
looking for a niche and new flavors, plus craft styles command
higher prices, which means more money for brewers.
"Everybody's trying to get their arms around and their hands on
the more money you can make if you sell beer at a higher price,"
he said.
Green said Miller hopes the collection gets Miller Lite drinkers
to trade up to the new styles.
"Some may be intimidated by the heavy flavor profile and full
calories," Green said of regular craft beers. "So we're providing
a new beer that can give you craft-style taste with significantly
fewer calories and carbs."
Miller is pushing the beer's "Lite" aspect as much as its
"craft" taste. The beers all have 110 calories per 12-ounce
serving, which is more than Miller Lite's 96 calories. But it's
less than full-calorie craft beers.
Miller Lite's amber style is to compete with New Belgium Fat
Tire, which has 159 calories per serving. Wheat will go against
Blue Moon, made by Molson Coors Brewing Co. - which is set to
combine U.S. operations with Miller later this year. That has 169
calories. The blonde ale will go against Bass Ale, a British brew
imported by Anheuser-Busch Cos., with 155 calories per serving.
Anheuser-Busch, the nation's largest brewer with about half the
market, is doing something similar to one of its stronger brands,
Michelob, said Juli Niemann, an analyst with Smith Moore & Co. in
St. Louis. The new Michelob unit will be where Anheuser-Busch
focuses on similar craft-style type beers, like Michelob Porter,
and create new ones.
"They're trying to get the main brands back again into some
kind of dominance. They chose Michelob," Niemann said.
But Anheuser-Busch also has its own craft beers under different
labels, some of them found only in certain areas, such as Skipjack
Amber in the Mid-Atlantic, and ZiegenBock, which is found only in
Texas.
Miller has its own craft line as well in Leinenkugel's, which is
known for brands like Sunset Wheat and fruit-flavored brews.
Using different names is a smarter way to go for big brewers
trying to ride the craft beer wave, said David Morris, research
director of food and beverage at Mintel International Inc. Their
mainstay brands like Miller Lite have such strong brand identities
and loyal followings, it'll be hard for drinkers to think of them
in this new light.
Morris said he was skeptical the Miller Lite Brewers Collection
would be successful. It may give Miller Lite drinkers something new
and bring in a bit more money, but it won't lure people already
drinking craft beers, he said.
"It borrows from craft, it's craft-style," he said. "It's an
attempt to kind of approximate in the minds of consumers what craft
beer stands for."
Josh Ninabuck was drinking his usual brew, a Miller Lite, at the
Swingin' Door bar in Milwaukee on Thursday. He said if he wanted to
venture into the craft segment, he'd go for a Sam Adams, which is
made by Boston Beer Co., or something from a brewer with deeper
craft roots. But looking at his bottle, the 28-year-old said he'll
keep the status quo.
"I'll probably stick with what I know," Ninabuck said.