MILLER PUTS CATEGORY MANAGEMENT ON TAP

LISA A. TIBBITTS

SAN DIEGO -- Miller Brewing Co. aims to make beer a destination department in the supermarket.

"We hope that when retailers talk about beer, we're a part of that meeting," said Charlie Kapp, director of national trade development, speaking here at a conference sponsored by the Strategic Research Institute, New York. "What we want to end up with is to be the manager of the beer category in a particular chain."

The key to Miller's plans is its "retail discovery" process, according to Kapp. This process involves a detailed, store-level analysis of the entire category. It includes ranking the store's beer sales and outlining customer profiles. Miller then goes on to suggest appropriate promotion and advertising strategies, he said. Within the last year, Miller has expanded its category management pilot from three retail locations to more than 10, according to Kapp. After studying the results at several stores, Miller concluded that convenience and selection, not price, were the primary issues confronting consumers when they were deciding which brand to purchase.

Retailers had been promoting non-premium brands of beer at low prices, Kapp said. Also, distributors discovered when auditing stores that out-of-stocks were occurring frequently. Customer intercepts demonstrated that 15% to 25% of consumers would not buy beer if their preferred brand or package was not available.

To practice category management, Miller assembled a "cross-functional" team comprising brewery and retail personnel and Miller's distributors, all of whom work together to help supermarkets capitalize on opportunities within their stores, said Kapp.

Kapp described the team's "retail discovery" process as "an analysis of the customer's business from the customer's point of view."

Three months after beginning to work with an individual store, the team should be able to identify exactly what opportunities are available in that store, understand those opportunities and quantify them and then set about developing an action plan, Kapp said. The last step is executing and tracking the store's success.

Using category data provided by retailers, Miller compiles quarterly beer performance reports for the stores, and outlines and recommends training programs for store personnel who will handle the category.

"Instead of them managing the category, what they get is different points of view," Kapp said. "We've got all kinds of information we give them. They've got all kinds of information they give us."

With the help of area demographic information, the brewer creates promotions for customers at the stores, such as tie-ins with football and racing events.

The result of this increased interaction among members of the supply chain has lead to improved relationships all around, Kapp told Brand Marketing after his presentation.

Kapp stressed the need for retailer commitment because one of Miller's goals is to "maximize partnership benefits" with retailers.

"We have a shared vision of the future relationships," he said. "If the retailer really isn't committed, I can guarantee you limited success."