(Chicago, IL) – MillerCoors‘ management team, led by CEO, Tom Long, did a Q&A at the tail end of last week’s Q4 earnings call. The team offered some comments on two Tenth and Blake Beer Co. properties, the recently-acquired Crispin Cider and Blue Moon Brewing.
Long said the company acquired Crispin because they see it as “the most innovative, the most brand-oriented, and with the best capability to set the American palate toward what the future of cider really is.” That future, the company believes, is in crisp, dry, complex, totally natural cider and not overly sweet, cloying cider. Long also points out that Crispin has a wide range of offerings including barrel-aged ciders.
The company plans to move quickly due to a) competitive pressures coming in the segment and b) to steer cider drinkers away from cloying cider for the benefit of the category, as a whole. They seek to quickly double and then quadruple Crispin’s capacity rapidly. They see demand in chain stores and Long says they will have the capacity to serve these customers with consistent supply. They see big potential nationwide, not just in certain markets, albeit it in “select outlets.”
As for stemming the wine and spirits categories eroding the beer category, Crispin plays a part in the company’s strategy. “We believe volume will be sourced mostly from wine and spirits drinkers so we expect this to be a mostly additive move.”
Blue Moon Brewing:
President, Sales and Distributor Operations, Ed McBrien, offered some thoughts on Blue Moon Brewing.
The big opportunities are a) in the grocery channel with seasonal expansion where McBrien says the company is lagging behind some of the leading competitors, b) expanded distribution in convenience stores where craft has traditionally been behind the curve and c) on-premise (both Belgian White and seasonals).
New distribution on seasonals was worth over 300,000 incremental barrels to the company in 2011.
Blue Moon is now ranked second in the craft category in sales for variety packs and seasonals with a strong 2011 (ranked #1 in craft overall).
Blue Moon distribution in convenience stores is in the neighborhood of 50%. In 2011, they gained 20% in distribution points and they think they can achieve 20% growth again in 2012.
On the strength of premium lights (Coors Light, etc.) vs. crafts:
McBrien threw out some stats…
– Premium lights, in terms of velocity per point of distribution, are the hardest working items in a store (incl. productivity per linear sq. foot)
– New item news about premium lights drives more incremental volume than does new item news about crafts
– Better lift off of feature support in premium lights than do crafts
– Premium light display support drives better results for the retailer (not to mention, better lift from a larger base)
– Premium lights are twice as loyal as craft drinkers
That said, they have a “both/and” strategy and still believe strongly in the craft segment and think that it is healthy for the category, overall.
Finally, McBrien noted that Leinenkugel’s Summer Shandy was a 250,000 barrel business last year (they previously said 200,000 on a past call). He also made it a point to mention that that the company plans to expand Batch 19 this year.