Big Brew-Haha! The Battle Of The Beers

  • ILLUSTRATION FOR TIME BY CLARK MITCHELL

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    If future growth lies in China, the U.S. market remains easily the most profitable. Even in the down-and-dirty beer business, the recent skirmishes between Miller and Bud have been notable for their aggressiveness. With more and more Atkins-conscious beer drinkers watching their waistlines and Anheuser's Michelob Ultra low-carb beer taking off, Miller launched ads in late 2003 pointing out that Miller Lite had half the carbs of Bud Light. Then, in April, Adami upped the ante with the humorous President of Beers campaign. Once it became clear that Miller's well-crafted messages were having an impact, Budweiser responded with a negative counterattack, challenging both Miller's heritage, by making an issue of its foreign ownership, and its manliness, by dismissing Miller Lite as the "queen of carbs." "That's a very macho accusation against a brand that has been giving them a royal shellacking," said Adami, a hard-swearing chain smoker, in a recent speech.

    Only lately, however, has Adami started to find such charges funny. In May, Miller took the battle with Budweiser from the store shelves to a courtroom, seeking an injunction to stop Anheuser and its distributors from what it claimed were false and deceptive marketing practices, including the defacing of Miller products in stores with pro-Budweiser stickers. A federal court ordered Anheuser to pull liquor-store posters that said Miller is owned by South African Breweries — its parent, SABMiller, is now headquartered in London. But the judge allowed the continued airing of TV ads declaring that Miller is South African owned — and therefore ineligible, Budweiser's talking lizards informed viewers, to run for "president of beers." The legal offensive has since been dropped, but the bad blood persists. "They'll lead you to believe the ads are all part of their plan, but really it's desperate," says Michael Owens, A-B's new vice president of sales and marketing. "They've got all their juice on one brand — we're giving it back, in kind."

    Adami was brewing for a fight the minute he arrived at Miller more than a year ago. At the company's sprawling brick complex on a hillside above downtown Milwaukee, he encountered a complacent, top-heavy organization that seemed to have lost any sense of urgency. Some industry observers thought Miller and the No. 3 player, Coors, should merge to provide a stronger challenge to Anheuser-Busch. (Today the betting is that Coors may have to align with one of the multinationals or perhaps Canada's troubled Molson brewery, which is embroiled in a family succession battle.) For a brief moment early on, when he was living out of a suitcase at the Hyatt, says Adami, he was "looking out the window over the snowy streets and thinking, How did I ever get into this situation?"

    Soon enough, however, he set to work refocusing on the company's three core brands (Miller Lite, Miller Genuine Draft and the long-dormant Miller High Life). He increased the company's ad budget 50% and reformed what he once dubbed the Socialist Republic of Miller by getting rid of some 200 executives and implementing strict, performance-based metrics to judge those who managed to avoid the ax. Just as crucially, he set about improving relations with the independent distributors — many of whom ship both Miller and Coors from the breweries to the retailers, unlike Budweiser's primarily exclusive distributors — who had felt ignored by the old regime at Miller. With Adami hitting the road to press the flesh and rolling out marketing plans tailored to each of Miller's top 33 U.S. markets, the distributors' perspective has changed. "The [sales reps] come in weekly and sit down with us to put together a plan," says Brock Anderson, owner of Bonbright Distributors in Dayton, Ohio.

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