The "New" Coors / Miller Beers
by Jack Murray
Goose Island is the new Bud. So are Shock Top and ZiegenBock. And Leinenkugel’s
and Blue Moon, for that matter, could be called the new Coors or Miller.
Those brands are all owned by the world’s biggest brewers, which are aggressively
rolling out products designed to appeal to fans of craft beer. But they’re not putting
the microbrewers who started the movement out of business.
Instead, the new labels are taking sales from already-troubled mass-market brands
owned by the industry giants peddling these crafty brews. Analysts say that may
actually be a boon for their owners as margins can be considerably higher for craft
Sales of craft beers grew 16 percent in volume over the past year versus a
1.7 percent decline for the biggest U.S. beer brands. Sales of Bud Light were off by
1.3 percent and Miller Lite slid 4.4 percent.
That’s prompted multinationals like Anheuser-Busch InBev NV (ABI) and MillerCoors
LLC, with about 75 percent of the U.S. market between them, to introduce their own
craft-like brews -- many of which make little or no mention of their corporate
AB InBev paid $38.8 million for Goose Island in 2011, five years after it signed a
distribution deal with the Chicago brewer. And in 2006 it created Shock Top, a
Belgian-style wheat ale, to take on Blue Moon, the biggest of the craft-like labels
owned by industry leaders. The Goose Island brands soared 69 percent last year,
while Shock Top beers jumped 14 percent.
MillerCoors, co-owned by SABMiller Plc (SAB) and Molson Coors Brewing Co. in
2010 set up a unit called Tenth & Blake to focus on Blue Moon and other niche
brews as well as premium imports such as Pilsner Urquell from the Czech Republic
and Cusquena from Peru. Today, it has more than a dozen brands, including two
That’s not to say that the big brands are going to give up on their mass market brews
anytime soon. With about 21 percent of the beer market by volume, Bud Light alone
is about triple the size of the entire craft sector, The U.S. Brewers Association
defines “craft” as beers with annual sales below 6 million barrels and ownership by a
big player of no more than 25 percent. Despite the industry’s homespun image,
60 percent of drinkers don’t give much thought to what company owns the brand of
beer they drink.
Even as the giant brewers lose share with their leading brands, the shift could shore
up their profits since their craft-like beers enjoy higher margins, analysts and the
companies say. Goose Island retails for an average of about $33.10 per case versus
$20.17 for Bud Light. Some offshoots can be far pricier. Goose Island sells a brew
called Bourbon County Stout one day a year, the Friday after Thanksgiving, at about
$25 for a four-pack of 12-ounce bottles.
The higher prices help offset the added costs the industry’s giants face in producing
more small brands. They are typically more labor-intensive, use a wider range of
ingredients, and have more elaborate packaging and marketing.
The big companies also gain an edge over smaller rivals by producing the craft-like
brands in their industrial-scale breweries. Blue Moon is brewed at MillerCoors’
facilities across the U.S. And some Goose Island beers are made by AB InBev in Fort
Collins, Colorado, and Baldwinsville, New York, in addition to the brand’s original
brewery in Chicago.
beernexus.com - SPECIAL REPORT
Big Brewers muscle in.