Note to Big Beer: Beware the affronted beard!
MillerCoors, the joint venture between SABMiller plc (SBMRY) and Molson Coors Brewing Company (TAP), is facing a class-action lawsuit from craft beer enthusiasts for having the audacity to imply that Blue Moon—one of the fastest-growing beer brands in America—was a craft beer.
Given the affection that hipsters have for all things vintage, retro, and old-man chic, I’m a little surprised the lead plaintiff didn’t slap the MillerCoors marketing director with a white riding glove and demand satisfaction with pistols at dawn. Such was the offense taken.
I personally like Blue Moon, and I expect the suit to eventually be thrown out and groundless. But the plaintiffs do raise interesting points when they claim that MillerCoors went to “great lengths to disassociate Blue Moon beer from the MillerCoors name.”
We see this all the time in marketing. General Motors (GM) doesn’t exactly go out of its way in its Cadillac Escalade ads to point out that it also makes the everyman’s Chevy Silverado pickup truck. And I could find no mention of parent company Swatch Group (SWGAY), maker of the kitschy plastic Swatch watches, on the website for it upscale Omega watches. Image is the core of marketing, and MillerCoors is simply playing the game.
But in the case of craft beer, with its focus on small-batch and local brewing, association with a megabrewer is the kiss of death. And this is a major problem for Big Beer, as this is the only corner of the American beer market that is really growing these days. Overall beer sales were flat last year (up a measly 0.5%) and actually fell by 2% the year before. Yet craft beer sales are growing at 17.6% per year and now make up a sizable (and profitable) chunk of the market. Craft beer accounts for 11% of volume yet 19% of dollar sales. Spend any time in a pub frequented by beer snobs, and you’ll notice the price difference in your bar tab very quickly.
