Mike Esterl of the The Wall Street Journal recently posted an interview with MillerCoors Chief Executive Tom Long where they touched upon many subjects, including a new aluminum can Miller Lite will be launching this spring that has two openings; one for drinking and one that allows air into the can so the beer flows faster into your mouth. They call it their “taste-flow” can, while college kids have traditionally called it SHOTGUN!
Talk turned to MillerCoors’ plans for dealing with the scrappy rebellion that is craft beer. Here Mr. Long’s comments start off kind of arrogant and wind up kind of ominous. According to Long, MillerCoors is already huge in the craft beer segment, as long as you consider brands like Blue Moon and Leinenkugel’s to be craft beer:
WSJ: Small craft beers also have been taking share from Anheuser-Busch and MillerCoors. What’s your strategy with respect to craft?
Mr. Long: We’re a big player in craft. The single-biggest brand in craft is Blue Moon, which is ours. The fourth-biggest brand in craft is [our brand] Leinenkugel’s. At [craft business unit] Tenth and Blake, the plan is to grow about 60% over the next three years.
If we can play really hard in the fastest sector right now, which is craft, which we are doing, and we can do well with Miller Lite, Coors Light and Miller 64, then our company will do quite well.
WSJ: You recently bought a minority stake in Terrapin, a small brewery in Georgia. Besides money, what can you offer small brewers? Are you going to buy more of them?
Mr. Long: We can help them get distribution faster. We bring an enormous amount of assets in brewing processes, technology, procurement and back office that small companies don’t have.
We’re in dialogue with lots of companies. Those things have to work just right for them and have to be comfortable for everyone.
I had no idea that Terrapin was in bed with MillerCoors, and I think this is a clear indication of where the industry is headed. After all, Mr. Long said they are playing hard in the craft beer sector right now and, “We’re in dialogue with lots of companies.” That 60% three-year growth of their Tenth & Blake craft beer unit isn’t going to come from a run on Summer Shandy – it’ll come through acquisition. This is happening, folks.
With the big boys cutting checks left and right, any brewery that is approached by MillerCoors or Anheuser-Busch needs to think long and hard about taking their money. In five years the craft beer landscape could be quite different than today, and the breweries that strike a deal with the devil now might be the ones left standing later. I’m not talking about established powerhouses like Dogfish Head or The Bruery or New Belgium – they’ll be fine on their own – but a smaller outfit like Terrapin might be wise to take advantage of the procurement pull and distribution power that a company like MillerCoors has to offer. Terrapin might not be selling out exactly, perhaps they are just embracing the inevitable future and trying to make a smart decision for the future of their business (by selling out a little bit).
As in all matters, time will tell who is right or wrong. I guess we’ll know it’s all gone sideways when we see Dale’s Pale Ale in a taste-flow can.
In the meantime, we can expect to see more and more honest-to-goodness craft breweries forging alliances with the big boys. The future is unfolding before our eyes.