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Brews, Branding and Budgets: A Sit-Down with Jim Meier from MillerCoors

Miller

Jim Meier, Senior Director, Marketing Finance, MillerCoors, and I have been on a few rodeos before including speaking at the C-Suite Conference, and a few apropos beers here and there. Nothing but MillerCoors’ brands, to be exact. Jim is a big Marquette University men’s basketball fan. I am not. My team, Providence College, lost to them twice this year in hoops which only dragged us down from the top 10 to a recent dive outside of the top 25. Nonetheless, I don’t hold that against Jim.

As the Senior Director, Marketing Finance, one can imagine Jim’s strength is rooted in finance. He primarily partners with marketing peers to ensure that the brand strategy and customer growth meet the monetary needs of the company and shareholders. However, Jim is well healed in understanding and respecting the role of marketing. After all, he is in CPG. There are plenty of other industries that do not have marketing and finance departments’ partner so closely, let alone be on the same floor with one another.

I thought it would make sense for people to get to know why an ex-E&Y auditor by trade ended up appreciating marketing, how brand management works at MillersCoors, why craft beer allures seemingly every 21-year old, and truly understand if he thinks his alma mater will make it off the bubble watch for March Madness.

 

Jim, let’s first start with your transition from Ernst & Young to MillerCoors. What was attractive about MillerCoors that made you go from a “vendor/partner” to being on the “client-side”?

Response: Well, my early years in public accounting actually date back to Ernst & Whinney when there still were the “Big 8.” But after just over 8 years in public accounting, I really wanted to get into more of a day-to-day business decision-making role. That said, my first step out was a bit of a baby step to an Internal Audit position with Philip Morris which at the time was the 100% owner of Miller Brewing Company. My intent all along was to use that role as a stepping stone to get into Finance, and I moved into Miller Brewing’s Finance Division after about three years, though the first couple of roles were still very “corporate” and very “accounting.” Ultimately, however, my career progression took me into Finance roles that supported the outward-facing aspects of the company – that is, Sales, Integrated Supply Chain, and Marketing – roles in which traditional accounting is only about 5% of the mix, and things like forecasting, analysis, and strategy comprise the bulk of the work. And at the Senior Director level, some of my duties require working across functions, so it’s not just Marketing and Finance, but Marketing and Finance and Sales and Strategy and Human Resources. Miller Brewing, and now MillerCoors, has continued to be my employer of choice largely because of this strong commitment to personal development and career opportunity, apart from the fact that being an accountant working at a beer company is pretty cool!

 

Most people don’t know that MillerCoors has been a joint venture (JV) for several years. What was the strategic implication for the two companies to join forces? How about sharing a war story or two about the cultures working in combination considering that many JVs by nature do not pay off financially, and there can be inevitable culture clashes. And please do explain what is up with the ABInbev deal.

Response: Well, my first major organizational transition occurred in 2002 when Philip Morris sold Miller Brewing to what then became SABMiller. And, recall that Philip Morris in those days was the global tobacco and food leviathan that, oh by the way, also owned Miller Brewing which as I remember was less than 5% of their top and bottom lines. Becoming part of SABMiller as a global beer company was hugely transformational for Miller Brewing and the people who worked there, and frankly it was nearly 100% positive. Suddenly, we had global access to best practices and top talent in beer. Personally, I have participated in many global efforts that have taken me to Cape Town, London, Moscow, and Shanghai, among other places. And SABMiller promotes an extremely collaborative culture that encourages cross-functional interaction and thinking, so it’s not just about delivering the results, or the “what,” but also “how” you accomplish those things.

Comparatively speaking, then, in 2008 when SABMiller partnered with MolsonCoors to combine their respective US-based businesses into the MillerCoors joint venture, it was much less of a culture shock. We very much approached it as – neither pre-existing approach and culture would prevail, but a new MillerCoors way of thinking and culture needed to emerge. Coming from the Miller Brewing side, what I appreciated most from the Coors side was the family aspect embodied by people such as Pete Coors. That had been missing from Miller Brewing since the tragic death of Fred Miller and his son in a plane crash back in 1954. And the first couple years of the joint venture were heavily focused on identifying and achieving cost synergies, which I as I recall totaled over $700 million at the point when we stopped counting.

The ABInbev deal, while globally complex, is actually quite simple as it relates to the US. ABInbev intends to buy SABMiller who is one of MillerCoors’ two shareholders, the other being MolsonCoors. If that were to happen, ABInbev would need to sell its ownership in MillerCoors because they would dominate the United States beer market. No one knows exactly the timing of this global beer deal, but experts believe it will happen in the second half of this year. If a deal is completed, MillerCoors will continue to largely do business exactly as it does today, but would be wholly owned by MolsonCoors.

 

Craft beer is growing rapidly across many demographics. When I travel, sometimes I hear people at bars ask, “What is your local brewery?” Is this a signal that Americans are returning to the notion that local is better, fresher, and better for the economy?

There has never been a better time to be in the beer business with so many different styles and varietals, and as a result, there are more choices than ever before. The beer business has always been a local business. However, with two new craft beer companies popping up around the country every day, it’s easy to see why people think it’s more local. Today’s craft consumers are looking for quality, flavor, and an authentic story related to the brand. Luckily at MillerCoors, we have two of the best craft brewers, one being The Jacob Leinenkugel Brewery that has sixth generation family members still working at the brewery in Chippewa Falls, Wisconsin. Additionally, The Blue Moon Brewing Company celebrated its 20th anniversary last year and is considered the largest craft beer in the United States.

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Until I was exposed to MillerCoors’ rooftop bar in Chicago, I had no idea how many brands are under the MillerCoors brand. (P.S. – if anyone listening thinks this is open to the public, think again!) How many brands do you manage, and what are some of the trends you see in the future regarding the consumers’ tastes to drive market share?

MillerCoors has approximately 35 brands across its portfolio. They range across all categories within beer including crafts, imports, premium lights, Flavored Malt Beverages (FMBs), full-calorie lagers, ciders, and economy-priced brands. Nearly all of the growth in beer today is happening at the high end. Consumers are looking for more taste, more flavor, and in many cases more alcohol content. MillerCoors brands like Redd’s, Henry’s Hard Soda, Leinenkugel’s, and Blue Moon are all growing nicely. But light beers are still by far the biggest category representing approximately 33% of all volume sales in the U.S. and 50% of dollar sales. This is because they are session-able and easy to drink.

 

Bringing back the traditional Miller Lite label was genius. It reminds me of the “Tastes great, less filling” commercials. How did marketing conclude this could drive volume and profit? And please explain how you, as a finance leader, could prove it was the label that was the single most important variable that was the cause of such growth over all other conditions in the marketplace?

MillerBottles

Response: There was this realization that as the original light beer (which pre-dated both Coors Light and Bud Light), there could be a powerful message of “authenticity” that would resonate with consumers across multiple age cohorts. And, a visible and recognizable “face” to that authenticity would be the original white packaging. When initially adopted on our can packages very early in 2014, related sales volume showed an immediate and sustained trend change. And when I say “immediate,” I mean literally to the day! Your question on proving the impact gets to the on-going debate about whether correlation is causation or coincidence. In this particular situation, I had no doubt that the correlation we were seeing was causation. And the anecdotal information coming back from retailers and distributors was very positive. Frankly, none of us felt we needed to do any advanced research, which as you would expect is something we absolutely do in other circumstances. But we had to move quickly to determine if we wanted to proliferate the white visual-ID across the rest of our Miller Lite packaging and other brand assets such as stadium signage. Sometimes you need to rely on instinct and judgment. Ultimately, our more sophisticated mix modeling algorithms proved this out.

 

How exactly do finance and marketing partner? In many other industries, these two departments usually butt heads regarding spend. After all, proving out Marketing ROI is challenging.

Response: In a large organization, it is easy for any two divisions to become siloed and not get along. Finance and Marketing is just one of those possible pairs. But as the MillerCoors organization is designed, Finance is strongly and tightly matrixed in with commercial side of the business. So, I report to both the CFO and CMO, and that matrixed structure extends below me down to the financial analyst level. So that structure, along with the physical proximity of Marketing and Finance, helps to facilitate cross-functional understanding and collaboration. To go into those topics a little more deeply, my finance staff members sit with their marketing counterparts in our Chicago office, not in some stand-alone finance wing. In my view, that is a “must have.” We encourage sharing of information such that we all appreciate one another’s acumen and craft. And there are perhaps more subtle things, like encouraging finance people to communicate in a direct and understandable way. As an SABMiller peer once told me, “Spreadsheets are for calculating, not communicating.” And unlike supporting an area like production where metrics are very precise and have very low uncertainty, we have to accept some degree of ambiguity and uncertainty in an area such as Marketing ROI. That does not mean we punt on any attempt to discern reality, but the fact is that understanding things like brand preference has greater inherent ambiguity and uncertainty than measuring the throughput of a packaging line.

 

Ok, let’s really see if you’re rational in your thought. Most “bean” counters are. In or out?

Response: Regrettably, for Marquette this year, I think it is “out,” with the only chance of “in” being running the table at The Big East Tournament. I will be attending the tournament in Madison Square Garden hoping for exactly that!

NCAA

 

By Jeff Winsper

Jeff is the President of Black Ink and offers more than 20 years of leadership experience in marketing, serving companies ranging from Fortune 500 to start ups.

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