Coors Light sales down for first time in 25 years

Modern Brewery Age, Oct 11, 2004

AP--Sales of Coors Light, Adolph Coors Co.'s most important beer brand, have dropped for the first time since it was launched more than 25 years ago.

Last year, Coors Light made up 8 percent of the U.S. beer market, down from 8.1 percent the year before. The loss amounts to more than 325,000 gallons and analysts say the decline will continue.

"There has been a slight decline (in Coors Light)," said Laura Sankey, Coors' vice president for corporate communications. "I think it's gotten mischaracterized to feel like it's bigger, but you never want to lose share."

Further losses could pose a problem for the company, based in Golden, because the Coors Light brand accounts for 75 percent of its U.S. beer volume.

A reason for the decline may be Coors' decision in late 2001 to focus Coors Light marketing on twenty-something males. Analysts say the move may have alienated older drinkers instead of boosting sales.

"They seem to believe that the advertising has got traction with consumers, but it doesn't appear that it is moving the needle," said Eric Shepard, executive editor of Beer Marketers Insights.

Coors Light's newest campaign touts that the beer is shipped in temperature-controlled rail cars. "They're very productfocused ads, full of good facts about how we try to keep our beer as cold as possible," Sankey said. "I think they'll appeal to drinkers of all ages."

Coors did post positive earnings in 2003. The company reporting $174.7 million in net income in 2003, up 8 percent over 2002.

"They've saved some money and optimized productions, packaging. That's really helped them keep their head above water," said David Hartley, an analyst at First Associates in Toronto. "But you can't do it forever."

Bud Light is the No. 1 selling beer in the country to date this year, followed by Budweiser, Miller Light and Coors Light, according to Beer Marketers Insights.

"Coors Light was growing very steadily right up through the year 2000 _ that's when they hit the wall," Shepard said.

But times have been tough for the entire American brewing industry. Adams Beverage Group said domestic beer sales declined by 0.3 percent last year.

Coors Light has continued to sell well in Canada, where it is the top-selling light beer and ranks fourth overall in beer sales.

Analysts say the proposed merger with Montreal brewer Molson Inc. could help Coors capitalize on their existing distribution partnership, which has led to big growth for Coors Light in Canada.

"Having the Canadian business gives them a steady cash-flow stream, it allows them to milk that cash string to help build their portfolio of brands in the U.S. over time," Hartley said. "I think they realize they have to be more diversified."