Miller to roll out MGD 64 Lemonade for summer

By Dow Jones Newswires-Wall Street Journal
Posted Jan. 14 at 1:35 p.m.

MillerCoors LLC plans to launch a lemonade-flavored version of low-calorie beer MGD 64, the latest effort by a big U.S. brewer to rejuvenate sales.

MillerCoors, the second-largest U.S. beer maker by revenue, will introduce MGD 64 Lemonade as a limited-edition summer brand in May.

The company expects the brew to attract new consumers to the beer category and to capitalize “on the growing consumer interest in flavored beers,” Andy England, chief marketing officer for Chicago-based MillerCoors, said in a memo to employees Friday.

Miller Genuine Draft 64, named for the number of calories it contains, got off to an auspicious start after its national rollout in 2008. But sales have cooled. The brand’s unit sales to retailers fell by a double-digit rate in the third quarter, the company said in November, while MillerCoors’s overall sales to retailers declined 4 percent.

MGD 64 Lemonade will be sold from May through Labor Day,  the industry’s biggest selling season.

MillerCoors also will unveil a new marketing campaign for the main version of MGD 64 this year as part of an effort to strengthen the brand, England said in Friday’s memo.

MillerCoors, a joint venture of U.K. beer giant SABMiller PLC and U.S.-Canadian brewer Molson Coors Brewing Co., has struggled with another fruit-flavored brand: Miller Chill. The lime-infused light lager enjoyed a strong debut in 2007, but its sales slid after larger rival Anheuser-Busch Inc. unveiled Bud Light Lime the next year.

The announcement of MGD 64 Lemonade comes at a time of declining sales volumes for mass-market brews in the U.S. The industry has been hurt by high unemployment and rising competition from wine, distilled spirits and  “craft” beers.

MillerCoors’ beer shipments to distributors, a measure of sales volume, fell 3.4 percent last year, according to preliminary estimates this week from industry newsletter Beer Marketer’s Insights. Shipments for Anheuser-Busch, the U.S. arm of Belgium’s Anheuser-Busch InBev NV, slipped 3.1 percent.

The two brewers, which together account for nearly four out of every five beers sold in the U.S., still have managed to record steady profit growth, offsetting their weaker sales volumes by raising prices and cutting costs.

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