It’s Not Quite Miller Time

Sales rebound a bit on high-end growth

Sales of Miller Brewing Co. beers slipped 0.7 percent in the first quarter, ending June 30th, the company’s first quarter for fiscal 2008.

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 craft-alikes like Leinenkugel’s are seeing double digit growth, the company said last week.

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.”

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

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