The deal immediately strengthens the Miller portfolio with two fast-growing and profitable brands that are defining their respective product categories and far outpacing overall industry growth. Miller also expands its innovation capability and expertise by aligning itself with an entrepreneurial pioneer with a proven track record of creating highly successful, first-mover brands like Steel Reserve and Sparks.
“Sparks and Steel Reserve will have an immediate positive impact on our growth profile,” said Norman Adami, president and CEO of Miller Brewing Company, a wholly owned subsidiary of SABMiller plc. “In addition, our new product development relationship with Minott Wessinger connects us with a very special guy when it comes to innovation.”
Under Mr. Wessinger’s leadership, the Sparks and Steel Reserve brands have grown at triple and double digits respectively. Miller plans to build on their innovative and highly differentiated positionings and continue their impressive growth by leveraging Miller’s first class marketing, sales and distribution platforms.
“I’m very excited about the new relationship with Miller and confident that they will take Sparks and Steel Reserve to the next level with great marketing and sales support,” said Mr. Wessinger. “The U.S. beverage market is changing rapidly and there are tremendous opportunities for us to create new brands that bring value to consumers, wholesalers and retailers.”
Both Sparks and Steel Reserve are already brewed by Miller under a contract brewing agreement with McKenzie River. Under the new agreement, the parties have also agreed to a long-term contract brewing relationship. The majority of Sparks and Steel Reserve volume is currently distributed by U.S. wholesalers who also carry Miller brands.
McKenzie River has successfully built national distribution of both the Sparks and Steel Reserve brands through seeding in independent C-stores followed by expansion into chain convenience stores and supermarkets. Miller intends to increase the channel penetration of the brands.
Besides acquiring great brands, Miller also gains access to Mr. Wessinger’s creativity and entrepreneurial winning streak through a formal product development relationship.
“Our new relationship with McKenzie River will enable Miller to tap into emerging consumer trends and leverage new brands through our national system of distributor partners,” Mr. Adami said.