The Spark is gone
MillerCoors agreed in December last year to stop producing and selling caffeinated-alcoholic drinks under a settlement with more than a dozen state attorneys general. The Sparks agreement – in which MillerCoors promised to remove caffeine, taurine, guarana and ginseng from the drink – was a blow to MillerCoors because Sparks had become the dominant product in the category.
But the company said in December it was confident it could continue to increase Sparks sales, which has now been turned into an alcopop with an energy drink flavour, but without the energy-boosting ingredients.
MillerCoors said that fourth quarter net sales increased 3.1 percent to USD 1.74 billion amid the price hikes, helping push gross margin up to 31.9 percent from 30.2 percent. Volume slid 4.4 percent to 16.1 million barrels (18.8 million hl).
Coors should be pleased that its original brands – Keystone Light and the Blue Moon wheat beer – were among the winners in the Christmas quarter. Five out of the company’s six priority brands increased sales to retailers during the period, with Blue Moon and Keystone Light delivering double-digit growth.
Sales of Coors Light increased 1 percent, posting its 14th consecutive quarter of growth, MillerCoors said. Overall sales to retailers fell 2.3 percent, reflecting a weaker quarter for the industry and a softness in the Miller Lite brand – which is marketing New Speak for declining sales.
Sales to wholesalers fell 4.3 percent as distributors cut back their inventory levels.
Meanwhile, MillerCoors said it is "well on its way" to delivering its goal of USD 500 million in annual savings by the third year of combined operations.
Following the creation of MillerCoors in July 2008, everybody was wondering where the group’s new headquarters would be. Milwaukee, the headquarter of Miller, was hard to get to and Denver was too Coors-dominated. In October 2008 it was announced that in June this year, the company would move into about 130,000 square feet at 250 S. Wacker Drive in downtown Chicago, having secured a 15-year lease.
Some 400 employees will work there — part of the pairing’s effort to save on costs — including senior executives, and employees in marketing, human resources, legal, finance and other divisions.
Many of the employees will be shifted from Milwaukee and Golden, Molson Coors’ headquarters in Colorado. Between 150 and 175 will be coming from each city.
