Speaking at SAB Miller’s quarterly divisional seminar on Tuesday, Andrew England, chief marketing officer and executive VP for Miller Coors said that that flavoured malt beverages had grown 49% in the year to date.
In 2012, malt flavour extensions accounted for 100% of the Mike’s Hard franchise and 50% of the growth of the Twisted Tea franchise, the executive (representing Molson Coors and SAB Miller’s US JV) said.
“Six in new 10 spirits SKUs are flavoured products according to Nielsen, and flavoured alcohol is growing fast because milenials love them,” England said.
Tom Long, Miller Coors CEO,added: “Today’s consumer, not just millennial, are in search of much bolder flavors. And we see that in food culture across America, and it’s not unexpected that that would spill over into the beverage culture.
‘Redd’s is going to own apple’
“We see it in soft drinks, we see it in still and carbonated beverages and we also see it in beer. So the market is ready, willing and able to tap this,” Long said.
Molson Coors launched Redd’s Apple Ale (produced by Redd’s Brewing Company, in Albany, Georgia) nationally in 2013, although it already existed in SAB Miller’s portfolio in around five different countries, “we brought it to the US, we’ve adapted it and launched it nationally”, he added.
“As we like to say, Mike’s owns lemonade, Boston Beer owns tea [Twisted Tea] Redd’s is going to own apple,” England said.
The above-premium ale, with its distinctive red branding, is aimed at both men and women, England said, and is performing extremely well as the fifth fastest-growing brand in its category (according to Nielsen) with 160000+ points of distribution.
Strawberry Redd’s Apple Ale launch imminent
Velocities (sales per hour, day, week) for Redd’s are now twice that of Mike’s Hard Lemonade or Smirnoff Ice, England added, while it was sourcing 86% of its sales from outside the MillerCoors portfolio.
“As of yesterday, it had a 0.24 [all outlet case share], so it’s obviously moving very much in the right direction, which is why later this year, wer’e going to add strawberry Redd’s Apple Ale [pictured]” he said.
Discussing innovation, England said that MillerCoors had grown its innovation team by over 80% since 2011, and upped its innovation six-fold, excluding a 2013 planned marketing spend on Redd’s and Third Shift.
Later on in the seminar, Long described Redd’s as a mass brand and said his firm would spend over $30m on the brand this year, although he admitted that Miller Coors had a “tiny presence” in flavored malt beverages, which are less hotly contested than other categories.
Based on the success of Redd’s Apple Ale thus far, Long said Miller Coors believed that “flavored malt beverages are a good place for our growth, whether in fact that net category grows for the industry”.
Besides stepping-up investment (to grow share in above premium) in Coors, Tenth & Blake, Blue Moon Brewing Company, Jacob Leinenkugel Brewing Company and the Crispin Cidery, Long said the “second prong” involved new brand innovation in the like’s of Redd’s and Third Shift.
“They’re different than the brands that we talked about with the Cidery [Crispin] and Blue Moon and Leinenkugel’s. Those are discovery brands. They’re rolled-out very slowly.”