THE GIST
MillerCoors announced this week plans to launch a new craft Light Lager via Saint Archer Brewing Co., a San Diego-based company that was purchased by the conglomerate in 2015.
Saint Archer Gold, which the company describes as "a Helles-inspired lager," is meant to fill a “white space in craft brewing" thanks to its low number of calories (95) and carbs (2.6 grams) per can, according to brewery president Brad Nadal. That space is currently dominated by Michelob Ultra, Anheuser-Busch InBev's wildly popular beer that arguably owns the space already.
New brands are being released daily across the country, but what makes this latest announcement from MillerCoors particularly interesting is it acts as the third time this year the company to looked to some variation of low calorie/low carbohydrate space. In February, Two Hats made its retail debut led by the idea of fruit-flavored beer and low price, but also its caloric content. "Wait, 112 tiny calories for both Two Hats Lime and Two Hats Pineapple, what?” is how it's described on the brand's FAQ page. MillerCoors recently announced that Two Hats would be discontinued.
Then in August, MillerCoors unveiled plans for Cape Line, geared toward calorie-conscious consumers and featuring "half the sugar and calories, on average, of leading flavored malt-base beverages." It's a move reminiscent of the success behind Hard Seltzer, of which MillerCoors' own Henry's Hard Sparkling has seen success.
Finally, there's Saint Archer's new release, which is explicitly based around calories, even calling out Gold's soon-to-be, direct competitor by name. Gold will be a “low-calorie, low-carbohydrate beer that will appeal to both craft drinkers who want a more sessionable option without leaving craft, and Michelob Ultra drinkers who are interested in craft but still want lower carbs and calories,” Nadal told the MillerCoors blog.
Test markets for a 2019 release include Austin, Texas, Charlotte, North Carolina, Indianapolis, and Arizona.
WHY IT MATTERS
These days, you're either Michelob Ultra or trying to be, and in sharing news of Saint Archer's new brand, MillerCoors doesn't mince words, calling its new Light Lager a "craft-credentialed Mich Ultra fighter." As noted by the company, Ultra was up about 19% in dollar sales and almost 17% in volume through Aug. 25, as tracked per Nielsen. That success begat Constellation Brands' Corona Premier, another low-calorie beer, which the MillerCoors blog notes is the the "No. 3 Nielsen growth brand in the most-recent measurement."
And now here we are with Saint Archer Gold, another entry from a subsidiary of one of the country's largest brewers. In terms of value play, the idea of highlighting Saint Archer's "craft" status could be a good one. According to IRI figures tracked from grocery, convenience, and other stores, "Premium Light" and "Value Light" beer categories—essentially mainstream low-cal beers—lost about 7% and 8% in volume sales from 2013 to 2017. With three months to go in 2018, things weren't looking any better this year, either.
The irony of the situation shouldn't be lost on beer fans. Saint Archer, a business founded by extreme/action sports stars who made careers in "alternative" sports, is now working to elbow into a category otherwise defined by straightforward—and perhaps unexciting—beers. In an era of craft options, Light Lager was a beer style of the past, not the future. To its credit, Saint Archer Gold will use Noble hops, though it's not clear how strongly aroma or flavor of those ingredients will play in the final product.
More broadly, the continued effort by MillerCoors to stake a claim within some amount of the low-calorie segment shows the company believes strongly in its future potential. Or, at least, hopes for one. The Cape Line announcement included reference to consumer needs of "flavor without the higher calorie and higher sugar counts," and Two Hats was based around being a "sessionable" light beer and "cheap" in cost.
Saint Archer is being targeted at "active, health-conscious 25-to-44-year-old men and women," while Two Hats was meant for 21-to-24-year-olds. Cape Line is often mentioned as being for Millennials, which also fits into these general age ranges.
All of which begs the question of whether or not this segment is actually “white space” when Michelob Ultra has already colored in so much and while so many others are outside its lines. Given continued, targeted focus on health and young people, these brands clearly have specific purposes to help turn around ongoing troubles for MillerCoors.
By the Brewers Association's definition, craft will continue to have slow, but steady, growth. Large scale domestics are slowly dying. Imports are strong, but also don't fit a niche of "local" or "health." Given the fact that Michelob Ultra's sales volume has more than doubled in the last five years, it would make sense that someone would want to come for its well-packed, health-based lunch. In an odd way, it's another salvo in the decades-long battle between Anheuser-Busch, Miller, Coors, and all the myriad versions of these companies that exist now.
It's not every day there's fanfare behind a Light Lager (unless you're trying to take on the Big Boys), and this beer shows there’s a new battle taking place on the unexpected battleground of your waistline.
—Bryan Roth