Andrew England's blue eyes twinkle when talk turns to his favorite marketing campaigns. England is the CMO for MillerCoors, the parent company of the two eponymous beer brands, and he's pacing around his office, bouncing between the desk, a whiteboard, and a picture frame showing a series of Coors Light ads. He points to one featuring a sharply angled plastic cast of a mountain with a tap handle protruding from the back. Bars can install the refrigerated contraption, which chills the beer while growing a rime of frost. The product has never taken off, but of all the gimmicks MillerCoors has rolled out, from frost brew liners to cold-activated cans, England calls this one the "purest."
"Plenty of people have done 'supercold' delivery in draft. The thing that we did differently was we put a mountain on the bar top," he says, cracking a smile. "We said, 'Not only is this going to be colder than any other beer in the bar, but it's actually going to come out of a frozen mountain with real ice on it.' I mean, this is ambition!"
Beer has been losing market share to wines and spirits since the 1990s. At the same time, more and more beer drinkers are turning to better-tasting craft beers. Throw in a recession that has hit blue-collar men particularly hard and you get a desperate market for the big-brand beers such as Budweiser and Coors. Over the past three years, craft sales have grown 11% by volume; total beer sales have dropped 2%. Yet Coors Light and MillerCoors have defied the trend. Since 2006, Coors Light is the only top-10 beer in the country to post consistent annual sales growth (see sidebar), and MillerCoors grew revenue 4.3% in the second quarter of this year to $2.2 billion. So how did Coors Light--which doesn't taste great (England says the top criticism is that the beer is watery) and isn't much different from its competitors (he calls his a "relatively nondifferentiated segment")--grow in a market like that?
Ever since England took the helm in 2006, he and his team have kept the idea of "cold" at the heart of their creative process. Rather than pitching Coors Light as "best" (or mentioning taste at all), the team began selling "The World's Most Refreshing Beer" in 2007. And instead of changing the actual product, they turned to packaging, with innovations focused on the words in their mantra: Rocky Mountain Cold Refreshment.
"We literally said, 'Okay, we're going to do nothing but focus around cold. And we're going to bring in experts from the liquid-nitrogen or ice-cream business," England explains. He hired Ideas to Go, a consulting firm, which convened such "experts" as the president of a dry-ice manufacturing company and an ice sculptor, in an Orlando, Florida, conference center. "We were looking for people who could help explore cold from perspectives MillerCoors had never considered," says Christine Haskins, who headed the project for the firm.
In 2007, Coors unveiled the cold-activated bottle, featuring thermochromatic ink that turns the Rockies blue when the beer is cold. Next was the vented wide-mouth can, which provides a "smoother, draftlike" experience. Finally, like the Onion headline that mocked Gillette and the "razor-blade arms race" ("Fuck Everything, We're Doing Five Blades "), in 2011, Coors Light slapped onto their bottles and cans a second "supercold" stage of cold activation.
"There's a certain number of places you can say cold, and they've done a sort of remarkable job," says Eric Shepard, executive editor of Beer Marketer's Insights, a trade magazine. And as ridiculous as this may seem, Shepard says it has worked. Last year, Coors Light unseated the King of Beers and pulled into the No. 2 spot, behind only Bud Light. It was the first time since 1993 that Bud and Bud Light didn't hold the top two spots.
To many, the brand's campaign defies logic: A beer, regardless of brand, is as cold as the refrigerator it's in. And predictably, the company has received a good deal of mockery, including an ad from Breckenridge Brewery in which a man touches a bottle of beer before announcing, "It's cold." But the irrationality of the focus on cold is great marketing, says Tom Pirko, president of consultancy firm Bevmark. "What they have is this Pavlovian thing, where an image goes deep into your psyche," he says. "It's emotional, not intellectual." For all the talk of innovation in marketing, sometimes you just have to get it right at the gut level.
There is another possible explanation for Coors Light's success, says Esther Kwon, an analyst with Standard & Poor's. While Budweiser and Bud Light are everywhere, Coors Light still had not penetrated some parts of the country a few years ago. What's more, when Molson Coors and London-based SABMiller combined their U.S. operations in 2007, the idea was to share distribution networks in order to take on Anheuser-Busch, which holds nearly half of the market. But Miller Lite has not shared the success of its sister brand. While a new "punch-top can" did help push that brand's can sales up by single digits in the second quarter (the punch top evidently reduces glug by 41%), overall sales continue to shrink. It seems even a punch-top can is not as simple and effective as "cold."
Anheuser-Busch has been fighting back, with some success, by introducing new varieties of its flagship beers. Bud Light Platinum, launched in January, targets drinkers who prefer a higher-end product, and Bud Light Lime-a-Rita has sold briskly since its April unveiling. In response, Hennessy says Coors will be doubling down on its packaging with such designs as an all-silver special-edition can.
But the company is also hedging its bets on big-name brands. Over the past three years, MillerCoors's greatest growth has come from smaller brands such as Blue Moon, and the company is putting increasing emphasis on its imports, like Pilsner Urquell. Perhaps you've heard about that beer's new Freshness Initiative: Earlier this year, MillerCoors announced a series of steps, including new packaging, expedited delivery, and, yes, refrigerated shipping, to ensure that the next bottle you buy is "the freshest Pilsner Urquell available in the U.S."
At least until the super-freshest version is released.