Miller Brewing sales dip 0.7 percent

Miller Brewing sales dip 0.7 percent

	Published : Tue, 31 Jul 2007 23:26 By : Agencies Print this Story

MILWAUKEE (AP) - Sales of Miller Brewing Co. beers slipped 0.7 percent in the first quarter, again hurt by the industry's sagging sales of mainstay brews.

As drinkers trade staples such as Miller Genuine Draft for wines, spirits, imports and crafts, the Milwaukee-based brewer is banking on imports from the lineup of its London-based parent company, SABMiller PLC, to bolster profits. SABMiller's brands include pricier beers such as Peroni Nastro Azzurro and Pilsner Urquell.

While sales volumes are small, beers such as Peroni Nastro and crafts like Leinenkugel's are seeing double digit growth, the company said Tuesday.

SABMiller announced sales at its annual meeting Tuesday. Sales to North American retailers were down less than 1 percent for the three months ending June 30, the company's first quarter for fiscal 2008.

Despite the drop, the sales improved from the previous quarter, when North American sales fell 2.3 percent in the year-over-year period.

Miller Lite sales during the latest quarter were flat, while sales of Miller's much smaller premium brands, including Leinenkugel's, caffeinated alcoholic drink Sparks and new Latin-inspired Miller Chill, were up 63 percent, SABMiller said. Miller pushed up the nationwide rollout of Miller Chill, a beer brewed with hints of lime and salt, to Memorial Day because of its success in test markets.

The company's international portfolio makes up about 3 percent of Miller sales, said Mike Browne, portfolio director of international and specialty beers for Miller.

The increase in Miller's crafts and imports shows the company is gaining ground in the higher-end market, said Eric Shepard, executive editor of trade publication Beer Marketer's Insights. Still, that's a small part of its portfolio, significantly less than Miller Lite, he said.

'They still have some issues with the core brands. It's a similar story to what Anheuser-Busch is looking at,' he said. 'There's some weakness in the core but some performance around the edges.'

Bigger brewers, including the nation's largest -- Anheuser-Busch Cos. Inc. -- are having a difficult time keeping up with the increasingly popular craft beers, sales of which are up at least 10 percent this year, he said.

Shepard said the brewers are expanding into newer segments, but it will take time to build up sales volume.

Browne said Miller is being selective in marketing its imports, such as the Italian Peroni. It has learned it must focus on key markets rather than mass market the specialty beers.

With Peroni, it has targeted 12 major cities, including New York and San Francisco, and sales were up 50 percent this year, compared to last, he said.

'Almost by getting smaller, you can get bigger,' he said.

Last week, St. Louis-based Anheuser-Busch reported a 2.3 percent increase in U.S. beer volumes for the second quarter.