Coors Light gaining ground in beer category through disciplined marketing campaign
NEW YORK (Associated Press) - Beer industry analysts say a simple yet disciplined ad campaign focused on the Rocky Mountains has helped Coors Light grow faster than its competitors.
For Coors Light brewer Molson Coors Brewing Co., gone are the days of bikini-clad blondes and Silver Bullet trains. Now, virtually everything Coors Light has a tie in with the mountain range, whether it's the blue mountains on the bottle or the brew's tag line of Rocky Mountain cold refreshment.
"When they tried all this other funny stuff, it was just a flop," said Morningstar analyst Ann Gilpin. "Recently, they've kind of gone back to basics," adding the message is "resonating more with consumers."
Coors Brewing Co. spokeswoman Jenny Volanakis said the company's cold refreshment message has been part of the brand's positioning for some time, but the company "really started to play it up" in advertising and marketing in 2005.
"The brand team did decide to play up the cold refreshment message as a way to differentiate the brand," she said. "The strategy has worked."
Dave Perkins, president of global brand and market development at Molson Coors, said the Denver-based company has been "very, very disciplined" in promoting its Rocky Mountain tagline.
Molson Coors, for example, put a blue "frost brew liner" inside cans of Coors Light to protect the taste of the beer and inked its bottles to turn the Rocky Mountains on the label blue when the beer is at right drinking temperature.
The strategy has appeared to pay off, according to market researcher Information Resources Inc. The firm's data shows Molson Coors growing at a faster pace than all of the top 10 beer brands in the country.
Coors Light dollar sales rose nearly 8 percent in the year ended June 15 to $630.2 million. Bud Light _ still the No. 1 beer overall _ raked in $1.34 billion in sales for brewer Anheuser-Busch Cos. of St. Louis. But that figure represents growth of just 3 percent from a year ago.
"Bud Light is far and away the biggest light beer," said Nick Lake, vice president of client services in the beverage group at consumer research firm ACNielsen. But "growth rates have not been as strong as Coors Light."
The growth of Coors Light has already benefited Molson Coors' sales and profits. In its first quarter, sales to retail stores for Coors Light grew in the mid-single-digits, helping boost overall revenue by 10 percent. Net income soared to $37.1 million from $4.4 million in the year-ago period.
At Anheuser-Busch, which is trying to rebuff a takeover offer from Belgium brewer InBev SA, first-quarter profit fell about 1 percent with sales of core brands like Budweiser and Bud Light dipping more than 1 percent.
Analysts have questioned whether Anheuser lost its way in the past year by launching too many new products, including energy drinks and malt beverages, while ignoring its core brands like Bud Light.
Keith Levy, Anheuser's vice president of brand development, bristled at the suggestion that Anheuser-Busch may have been out-marketed by Molson Coors.
Levy said Coors Light's success hasn't affected Bud Light's sales and is instead putting a dent in the market share and sales of its other big rival _ SABMiller PLC's Miller Lite.
"If you look at Coors Light gains, it's coming at Miller Lite's expense," said Levy.
Levy said that with Molson Coors and U.K.-based SABMiller combining their U.S. operations into a joint venture, "there's going to be a winner and a loser relative to the light beer in-house."
But Julian Green, spokesman for Miller Brewing Co. _ the U.S. arm of SABMiller _ said the combination of the two brands will put the company in an enviable position.
"Both of these brands," he said, referring to both Coors Light and Miller Lite, "are set to win." 