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Coors enters popular-priced market despite reservation.

Coors enters popular-priced market despite reservations

The number two and four domestic brewers are currently showcasing theories where an increase in market share does not necessarily begin and end with a dry beer product. On the heels of Miller Brewing Co.'s announcement of a light beer extension to its Miller Genuine Draft label, Coors Brewing Co. has announced the addition of two popular-price lables; Keystone and Keystone Light.

According to a Coors company press release, the new product additions will become available nationally on Sept. 11. The press release states, "With national expansion complete, Coors Brewing Co. is now looking at product expansion as an important means of continuing to grow. The introduction of Keystone and Keystone Light is an important step that will move Coors Brewing Co. closer to the realization of its goals."

Keystone and Keystone Light are the first popular-priced products in the rich 116-year history of the Colorado brewer. This category currently holds about 15 percent of the domestic market, and is for the most part dominated by Anheuser-Busch's Busch label, Stroh Brewery Co.'s Old Milwaukee brand and Miller's Meister Brau.

"Over the years, there has been a fairly consistent consumer demand for high quality beer brands at a sub-premium price," said Craig Guthrie, brand development manager at Coors. "By meeting that demand, we expect to gain incremental volume that will make both our wholesalers and Coors Brewing stronger and better able to compete."

Reports list Coors advertising budget at over $15 million for the rollout of these two brands.

The rollout of a popular-price product to Coors' existing line of libations was discussed at length by Coors Brewing President Peter Coors in a May interview with Modern Brewery Age. At the time, Coors cited capacity difficulties as a major stumbling block for a popular-priced beer.

"Coors has resisted entering the popular segment primarily because we're concerned about capacity capabilities and meeting demand," the brewery executive stated. "If we were to enter the marketplace with a popular-price beer and it was successful, how we would develop the capacity to produce that product is a question that has been a source of concern to us."

Coors brewed approximately 16.5 million barrels of beer in 1988. The Golden, CO brewery has a capacity listing of 18 million barrels annually. Coors said the brewer could produce upwards of 20 million barrels annually before being forced to add brewing capacity.

"We don't believe that with the way the pricing structure is, building capacity for the purpose of growing a popular-price beer makes much sense," he said.

Coors said it hopes to sell two or three million barrels of the new beers in 1990. The products will be packaged in both 12- and 16-ounce cans.
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Publication:Modern Brewery Age
Date:Jul 17, 1989
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