Adami faces daunting task at Miller.

AP--Miller Brewing's new boss is coming to a declining company that is losing market share amid faltering sales--a far cry from his old job in South Africa where parent company SABMiller dominates the beer market. To add even more pressure, SABMiller CEO Graham Mackay told shareholders in November to expect significant results in 18 months from the Milwaukee-based brewer.

Beer industry experts call Adami's assignment extremely difficult. St. Louis-based Anheuser-Busch leads the U.S. beer market with about a 50 percent share, followed by Miller with 19 percent and Coors with 11 percent. Miller's market share peaked at 22.7 percent in 1994.

Adami had served as chairman and managing director of South African Breweries, also a unit of SABMiller.

"He's in a learning mode and will be looking at new strategies once he gets his feet wet," Miller spokesman Mike Hennick said.

Adami needs to rethink the business, said beverage consultant Tom Pirko, presidant of BevMark LLC.

"There's a little company in St. Louis that just eats its young, and it's preying upon Miller right now," Pirko said, referring to powerhouse Anheuser-Busch.

Industry experts say he needs to focus on improving Miller's relationships with its distributors and reinvigorating its marketing campaign, all while cutting costs.

SABMiller bought Miller Brewing in May from tobacco giant Philip Morris Cos. in a $5.6 billion deal, forming the world's second-largest brewer behind Anheuser-Busch. SABMiller initially decided to stick with the company's management.

But in the six months since the deal closed in July, Miller's sales have slipped by 3 percent. SABMiller also yanked two of Miller's flopping "malternative" drinks.

Two weeks ago, SABMiller named Adami to replace John Bowlin as Miller's CEO. Adami officially took over Saturday but will not join Miller full time until Feb. 17, after he finalizes some immigration issues.

Adami comes to Miller with 20 years experience as an SAB executive in South Africa, while Bowlin had no experience in the beer business before becoming Miller's CEO in 1999.

Experts say Adami's beer experience is encouraging, but he'll find America's mature and complex beer market vastly different from South Africa's. London-based SABMiller has a 98 percent market share in South Africa.

"They've got a lot to learn in a tough environment when their trends aren't very good," said Benj Steinman, publisher of trade newsletter Beer Marketer's Insights. "It's not a great recipe for short-term success."

Miller can't fight the market share battle by cutting prices, because Anheuser-Busch will only follow, said Mark Rodman, who owns Beverage Distribution Consultants of Swampscott, Mass.

Adami will need to cut Miller's operating costs, but that alone won't turn around the company, he said.

Miller must strengthen its relationships with its distributions, who often carry other companies' products, analysts say. Rodman suggests Miller should consider offering its distributors some incentives, perhaps stock options. "The distributors really have to prefer the Miller portfolio," Rodman said. "Anything short of that will doom SABMiller's venture into this market."

Ed Bedwell, owner of Beverage Distributing Inc. of Washington, Pa., said under Philip Morris, Miller Brewing burned its relationships with distributors in part because the company wanted to control everything. Adami will need to meet with distributors and listen to their concerns, he said.

Bedwell said Miller's products don't pose a problem at all. "The product problem is they don't have good advertising behind their good products," Bedwell said.

Adami must breathe life into Miller's flat advertising along the lines of its "Tastes Great, Less Filling" Miller Lite ads, said David Kathman, a beverage industry analyst with Chicago-based Morningstar Inc. In doing so, Miller needs to better differentiate Miller Lite and its other brands from their competitors, analysts say.

"They need to go back to find an original voice for each of the name brands. For a long time they've been lost," Pirko said.

Earlier this month, Adami told the Sunday Times of South Africa he didn't expect his task to be easy. He told the newspaper he will concentrate on building better relationships with distributors and customers, but there is "no silver bullet" to Miller Brewing Company's turnaround.