If you've been noticing Coors Banquet a lot more lately, it's for a reason. In one of the most competitive times in American brewing history, most of the macro brewer labels are flat or failing, and craft beer continues to rise. Most of the large brewers are introducing new products at an unprecedented rate, tweaking everything from flavors to ABV to packaging to get drinkers to pay attention again. And while many gain an initial presence, they fade faster than ever.
But Pete Coors was quietly sitting on a gold mine all this time. While competitors continue to gut the authenticity of their brands, Coors Banquet enters this competitive market with a brand that's gone largely unnoticed, and therefore unscathed, for a long time. The beer that once drove fans to load up their trunks in Colorado and peddle it across the country is taking another shot at going national almost 30 years since it disappeared in the shadow of light lagers. There's nothing new about Banquet—same flavor, same family, even the same packaging since returning to its heritage stubby bottle and a "commemorative can." But that's precisely the point for the Coors team.
Alongside the return of brands like Genesee, there's a distinct "heritage" trend gaining steam in American brewing. It's not craft. It's not quite retro. But it's working. Double-digit growth for Banquet in Chicago proves it. And now Pete's in town to back it up. His perspective on the industry is a unique one, having the longevity many newer brewery owners can only hope for. He tells a good story, and he's pushing a beer that he believes is "in a perfect place" in the market. And he has craft brewers and consumers to thank...for some of it.
This is a great opportunity for me to round out the perspective on what's happening in the beer industry right now. I've recently been able to talk at length with Sam Calagione of Dogfish Head and John Hall of Goose Island, both celebrating some major shifts and expansions in their business as many maturing craft brewers are these days. But craft isn't the only part of the industry that's growing right now. While most of the major brands from macro brewers have been flat or declining, there's been a few long-standing brands, Coors Banquet being one of them, that have seen a recent spike, and I'd love to learn a bit more why that is, and what that means for the rest of the industry.
You're here today to celebrate Lottie's, a Chicago pub since 1934. A bar that Coors believes reflects the values of Coors Banquet beer. What are those values?
We're going to recognize bars all across the country that have been really dedicated, great retail customers. We'll also have one in Colorado, one in California. It's just an opportunity for us to thank the retailers that have been really good to our company and our brand, and have a lot of fun while we introduce a new package that we think is exciting.
But the values. What are the values that you'd associate with the Coors Banquet brand that you think are reflected in a place like Lottie's?
I guess it's a combination of things. First of all, it's loyalty to our brands, which is really important. In the beer business, you can ask any brewer and they'd tell you the same thing, something we value a lot is people who value our brand and are loyal to it. Another is longevity, because we've got bars that have been good friends of ours for a long, long time. And clearly, since we've been here in Chicagoland, Lottie's has been one of those accounts that's been really good to us. And I think something that's important as much as the retailers is the customer—their customers—who enjoy going to a place where they can sit down and have a good time where they feel comfortable. And they'll come back regularly. It's retailers that are really here to serve their customers in a really meaningful way.
And why would they choose Coors when they sit down at the bar at Lottie's? Why would they choose Coors over the growing number of craft beer options they have here? Where does that loyalty come from?
It tastes good. It's great beer. It's beer that's been around for a long, long time. When I started in the business roughly 1970, 43 years ago, it was the only brand we had. In eight packages in 11 states. And it peaked in about 1976, at about 12.6MM barrels. Coors Light, we thought it'd be 5% of our business. And they just went this way [makes a reversing motion with his hands]. And our big competitor in St. Louis had done the same thing. But the interesting thing is, that through all this time, no one ever said that there was anything wrong with the beer. So, I think one of the things people like about it is that it's a great tasting beer. And one of the reasons we're doing the new package is to get people thinking about it. It gives them just another reason to think about coming back to Coors Banquet. We think, based on our research so far, it'll serve that purpose and give retailers an opportunity to have something that's different and new. Whether this will spur a brand new movement to stubby bottles, I don't know [laughs]. But it's a really fun deal for us to go back to the historical roots with these bottles of Coors Banquet.
You mentioned that you think it'll bring people back to Coors. Where do you think they're coming back from?
I'm not sure they'll come back to Coors as much as people haven't thought about the brand. They'll have another reason to think, "Oh, that's interesting, I might try that." And if they try it, they're going to like the beer. I've said all along, it's what's in the bottle. For me, nothing else matters. You mess up what's in the bottle and there'll be consequences. [It's] very difficult to make this beer. Brewing Coors Banquet and Coors Light, or any of the light beers, is a huge challenge. The craft guys can't compete with it. Brewing a really good, full-flavored lager beer of this style is not easy.
We're certainly seeing a bit of a swing back towards lighter, full-flavored beers even in craft lately. People are trying to make more sessionable beers alongside the higher gravity beers in their portfolios. And many of them are making great lagers without question. New Glarus, Half Acre, Revolution—just to name a few. I'm not so sure the macro brewers can claim the same kind of dominance in this style any more.
Well, what's happened is that we've gone both directions. The craft brewers have. IPAs are still growing at a hefty rate. For me, personally, it's too much hops. They're not balanced. But people are liking them, so we're going to be where the market is. It's just something else we worry about. But this here, this is something that's been consistent since Prohibition was repealed.
I made a visit to Burke a few weeks ago, a distributor here in Chicago that serves both craft and Coors. They mentioned that Banquet was double-digit growth in Chicago, which I find fascinating.
We're doing really well here. It's exciting to see it. A couple things are happening. I think, first of all, people are seeing other people drinking Coors and thinking, "I gotta try that. I don't know anything about it." When we expanded nationally, we thought Coors Banquet was going to be the brand nationally. But then Coors Light went crazy. But people east of Kansas and the Mississippi never really got used to drinking Banquet. So, Coors Light's a huge brand for us here in Chicago. Now we're giving them an alternative. It's not a craft, it's not retro, we're just trying to help people understand that this is a really terrific beer that's been around for a long time. One of our best markets is New York City, believe it or not. They've done a great job positioning the brand for consumers in a piece of the market where there wasn't anything. Back when I was growing up in Colorado, we had Walters and Tivoli, all kinds of different brands, but everything was pretty much the same genre—5% ABV, or, in some cases, a little bit stronger, and typically lagers beers. When light beers came along in 1972-3, it changed the world. We'd advertise as "America's Fine Light Beer" because we were actually 13%, almost 14%, fewer calories than other premium beers. And we found [Banquet] kind of squeezed between light beers, and what was perceived as being more full-bodied beers, particularly Anheuser-Busch and Budweiser. Shlitz, Stroh's, Pabst, Falstaff, Shaffer, you go down the list, a long list of beers at one time. Shlitz at one time was the largest brand in America.
So what makes this Coors Banquet's time then? It seems like this is a major focus at the moment for MillerCoors. It's growing quickly in some markets, you're pointing to the heritage of the brand. You mentioned that it was squeezed before, but it doesn't seem squeezed any longer. What's shifted?
We're seeing some declines in the light beer category. All light beers. Coors Light continues to grow, but it's pretty flat at the moment. People are really curious about more flavorful beers right now, and I think Banquet gives them the opportunity to go for something with a little bit less of a robust taste than some of the craft beers they've been drinking, but still have a sessionable beer that they enjoy all night long. I think we're in a perfect place.
The other macro brewer success story in Chicago is from Crown Imports and the Modelo portfolio. We're seeing some growth there even while the rest of the market flattens. Why do you think that's the case?
I don't know. I can't drink them, personally. Corona absolutely sets me on edge. And we're putting oranges in wheat beers? I don't know. It's an interesting phenomenon. They're just way to sharp for me to drink. But they're doing very well. A lot of people like them. Not only the beer itself, but they like the idea that they can have a Corona and feel like they're in Mexico on vacation, sitting on the beach in a bar. Doesn't work for me, but then of course, I'm pretty particular.
There seem to be two plays in macro brewing these days—it's either a packaging gimmick to try and make the brand relevant again, like the Vortex bottle or the Double Pop-Top can. Or, they start to go where the market is with things like Third Shift and brew these more flavorful beers with a similar value proposition to craft. Banquet doesn't seem to be trying to do either one of those too explicitly.
Well, it sells itself. People like it. And the whole idea of the package is just to get people interested in the brand. It's been in brand decline from 1976 until about 7 years ago, around 2006. So, for 30 years, this brand was on a slide. Maybe it's one of the benefits of some of the more flavorful craft beers that people are saying "Yeah, I want something in the middle." But I don't want to be in the middle, I want to be on the leading edge. No one's ever said the beer wasn't any good. And marketing has a lot to do with it. The positioning on some of the Mexican beers is pretty interesting. I don't understand why some people want to drink Mexican beer instead of American beer, but that's a whole different story. You go to Washington DC and all you can get is Heineken and Amstel. I don't know why we have to have these international beers. You don't. If I go to Amsterdam, I want to drink Heineken. If they come here, I want them to drink our beer. Why can't people drink American beers? We have great beers. We have the best beers in the world.
Well, Chicago is an interesting case, because we certainly have a large Hispanic population here, many of them first-generation immigrants. So it seems reasonable to say that a lot of the affinity for Mexican beers is generated by that growing audience and it ripples out from there.
No question. But where Corona's got its caché is that you can have the beaches of Mexico right here.
I guess I'm thinking more in terms of Negro Modelo, Especial, Dos Equis—some of those brands.
People like a lot of different kinds of beers. They just don't appeal to me. It's not that they're bad beers, I just don't like them.
So where do you think you'll be in 5 years? What will your role be at Coors?
I hope I'm in a hammock somewhere enjoying life, but that's just impossible. We're very focused on growing the company both at Molson Coors and MillerCoors. And to the extent that I can help that process, that's where I'll spend my time. Being here is just an example of how I think we can leverage our family and our beer that's fairly unique. Fourth generation, my son David, was on the brand until 6-8 months ago. He's offshore on a special project or he'd be here because he still loves the brand. And now he's Third Shift. I'll continue to contribute. My uncle is 96 and he's still our chief technical officer. We have meetings once a month and we drink Coors Light from all 8 of our MillerCoors breweries and he opines on quality. I don't know if I'll live to 96, but to the extent that I can be healthy and productive for the company, I'll be there. That's where my investment is so that's where Pete Coors is going to be.