SABMiller goes Contrarian

Implications: In a move certain to be questioned by shareholders in the US, SABMiller has begun advertising the 'value' of its brands to a nationwide audience. This move is a complete 180° reversal to beer growth numbers in the past four years and features Miller Lite (premium) and Miller High Life (sub-premium) brands.

Analysis:
Midwestern success...

...with this campaign does not necessarily guarantee the ads will make a splash along the import beer driven coasts. The heartland of America is seemingly the last bastion of American beer dominance, so it makes sense that advertisements proclaiming the value of Miller brands would resonate well.


Crafts and Imports have momentum...

...along both seaboards, however, and are growing at breakneck speed. In the United States, Craft beer was up double digits in 2006 while import beers trended up an unheard of 14.7%. In contrast, Miller was down 1.0% and has seen its market share slip over four points over the past ten years.


Why Miller Lite & High Life?

Miller Lite still shows some potential coming off the failed 'Man-Law' commercials, but holds more promise than the repackaged and re-branded MGD franchise. The Milwaukee based brewer saw Coors and Anheuser-Busch take valuable market share away from High Life in the budget category with favorable pricing and increased focus on the Natural and Keystone families.


Time will tell...

...whether or not this new direction will bear fruit, but I wouldn't be caught holding my breath.