Former SAB boss 'coming to grips' with Miller
October 29, 2003
By Ann Crotty
Johannesburg - Former SAB chief Norman Adami was coming to grips with US beer group Miller, SABMiller chief executive Graham Mackay said at a breakfast meeting with journalists yesterday.
"The Miller business looks and feels different from what it was. There is an air of purpose in the company now," Mackay said. But he cautioned that Miller was like a supertanker and would take a long time to turn.
Mackay said management at Miller was implementing a "top-line turnaround strategy".
This was focused on marketing and brand management as well as the management of the distribution system, rather than on cost factors.
He pointed out that there was always uncertainty attached to a top-line turnaround strategy, unlike a strategy focused on cost management.
"It will take a long time to roll it out, but by the end of financial 2004 we will begin to see results."
Mackay said that the performance of Miller Lite, which is a key brand in the US portfolio, had started to lift a bit.
This was attributed to the improvements at management level and the fact that Miller Lite was a low-carbohydrate beer.
With obesity the number one health issue in the US, "low-carb" beers are a major marketing feature there.
On the longer-term prospects for Miller's, which has struggled to maintain its number two position to the powerful Budweiser brand belonging to Anheuser Busch, Mackay is adamant that there is ample room for a number two in that market.
"The support for Miller's is strong because people don't want to have just one company to deal with, but there is concern about Miller disappointing people in the past. There is support for a nimble number two player with a winning strategy."
The star performer in the SABMiller interim results, which are due out next month, will again be Europe, where growth of 8 percent has been achieved.
In South Africa, the beer division is again back in growth territory and has achieved a of 2.5 percent increase in volume in the six months to September.
"South Africa is still an emerging market and that is characterised by increases in per-capita consumption being directly related to increases in per-capita wealth."
In Africa and Asia volumes were up about 3 percent.
In South Africa, where beer volumes increased at the expense of wine, the sales of Miller Genuine Draft in the premium end of the market were in line with management's expectations.
Beer division chief executive Tony van Kralingen said management had forecast sales of 80 000 hectolitres in the first year and would be brewing Miller Genuine Draft locally from next month.
He pointed out SAB had an automatic right to renew its contract with Amstel when the current arrangement expired in 2008.
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