Miller Brewing Co., which bet heavily on the malternative category, is turning its attention back to its sagging flagship brand Miller Lite.
Saying that the No. 2 beer company “tried to do too much” with the launch of four malternative beverages between March and Labor Day, Miller is dramatically shifting gears. Miller Brewing’s sales fell 2.4 percent in the third quarter.
“I was not pleased with our performance,” said Miller CEO John Bowlin in his first interview with the Tribune since South African Breweries PLC bought Miller this year.
Bowlin said that trying to do four new product launches with Skyy Blue, Stoli Citrona, Sauza Diablo, and Jack Daniel’s Hard Cola while maintaining focus on its core brands “overwhelmed the system.” Miller will now commit up to 20 percent more of its marketing budget to Lite.
“There were too many tasks to do while at the same time, Bud and Bud Light turned up the dial in terms of their spending and focus and Coors turned up the spending on Coors Light. A lot of it is self-inflicted and correctable,” Bowlin said. He said the company needs to “go back and relentlessly focus on our No. 1 brand, which is Miller Lite.” Bowlin said Lite accounts for 40 percent of Miller’s overall sales and 50 percent of its profits.
Bowlin’s comments illustrate just how troublesome Miller’s product and marketing problems are right now. Despite launching so many malternatives, SAB Miller said that its market share in the U.S. beer industry fell slightly in the first nine months, to 19 percent. And while Miller wasn’t the only one to get caught up in the malternative frenzy, it was clear early in this year’s beer-selling season that the new category, which exploded on the scene last year, was beginning to go flat.
Bowlin said that the company has no plans to exit the category, unlike Coors Brewing Co., which dropped its entry, Vibe, earlier this year. But he said that the company has to do a better job in managing its brands.
Meanwhile, Bowlin confirmed that its listing Miller Genuine Draft brand will get mainly regional advertising and marketing support, as sales on the brand continue to decline.
“We’re going to de-emphasize national spending” behind the brand, he said, while dialing up spending in the brand’s 15 core markets.
Playboy cuts staff: In the clearest sign yet that Playboy Enterprises Inc. continues to suffer from an influx of competition in the men’s magazine category, the Chicago-based entertainment company said it was cutting 70 jobs, or 8 percent of its workforce. Roughly 25 of the jobs are in Chicago, including Managing Editor Jonathan Black. The company is also consolidating offices in Los Angeles.
“In what continues to be an uncertain economic environment, we are taking the difficult but prudent step of making additional cost cuts to help ensure we reach our target of further improvements to our 2003 financial results,” said Christie Hefner, Chairman and CEO of Playboy Enterprises. The company’s flagship Playboy magazine has lost ad dollars in recent years to magazines geared to younger male readers, such as Maxim and Stuff.
Media shocker on Madison Ave.: Donna Salvatore, chief executive of Starcom MediaVest Group’s MediaVest USA, is stepping down from her top post to work three days a week as chief investment strategist at the media shop–a new post. Replacing her is longtime Starcom and Leo Burnett media executive Laura Desmond, who had most recently been chief executive of Starcom MediaVest Group Latin America.
Salvatore said she wanted to concentrate on other interests, and that SMG boss Jack Klues “was very amenable to what I was putting in front of him.”
The move shocked many media executives. Salvatore is considered one of the strongest media negotiators in New York. And many in New York were relieved at the time that one of its own would continue running MediaVest in New York. She said that there were no problems between her and Klues. Now it will be one of Klues’ proteges who will run MediaVest. Desmond is credited with doubling SMG Latin American revenue over the past three years.
On the move: Susan Carlson, a reporter for WLS-AM 890 and traffic reporter fill-in on WLS-Ch. 7, is moving to WBBM-Ch. 2 to be the station’s new traffic reporter. … Lisa Wells, head of corporate communications at Foote, Cone & Belding Chicago, is leaving the firm to spend more time with her family. … Emily Klear, formerly an account executive at Channel 2, was named director of marketing at DiMeo & Co.