Live from ANA: Approach to Innovation Sets MillerCoors Apart

MillerCoors success formula is straightforward and frames what every marketer banks on: true innovation. But it’s how the beer maker arrives at that formula that sets them apart.

Patrick Edson, vice president of marketing innovation, said yesterday that two concepts drive ideation at the firm: Ideas that over the past 26 months have generated about $200 million in additional sales.

The first concept is that for an idea to be truly innovative, it has to create value and sell and have a basic way to measure success.

“If you want a great idea you have to start with a fundamentally great insight that competitors don’t have,” he said.

He said those understandings can be found in 20% of consumer insights and that the challenge lies is asking the question: Do we have the real understanding of people and situations that might not be obvious to us?

“Everybody has 80% of the consumer insights, so it’s that other 20% that creates that competitive advantage,” he said. “It’s an understanding beyond the obvious and our ability to decipher consumers’ unarticulated needs and unconscious behaviors. People are often not aware of how they are influenced.”

Edson said there are four characteristics that correlate whether an idea will be successful in the marketplace.

1. Is the idea driven by a compelling consumer insight?
2. Is it anchored in brand positioning?
3. Does it dramatize a point of differentiation versus the competition?
4. Does it provide a reason to believe.

The second concept in driving innovation is employing the right economic levers.

Most new products only generate about 5% of retail sales (2% for beer last year). And many companies make the mistake of putting resources and people against that 5% with very few or no resources focused on products already in market that are driving sales.

“It’s an out-of-whack model,” he says. “There needs to be a balance between the two. High performing organizations understand what the right idea looks like and can focus on big economic levers to ultimately drive profits.”

Edson cited three ways to innovate products currently on shelf as a way to reinvigorate core brands.

1. Innovate what’s already on shelf. As an example, MillerCoors launched cold-activated cans and bottles that turn blue when the beer is “cold as the Rockies.”
2. Innovate to win a retail channel. To boost sales at bars, MillerCoors introduced Super Cold Draft, or “frozen mountains” installed around beer taps that pour Coors Light at below freezing temperatures. “It brings great theater to a local level,” he said. “We own the coldest beer in the bar. That’s a good place to be if you have to compete.”
3. Innovate to find new usage occasions. One way MillerCoors did that was to introduce the new Coors Light Cooler Box, which functions as an all-in-one cooler. The carton holds the plastic bottles of beer and is lined so customers can simply add ice to the carton to chill down the beer. MillerCoors saw a 55% incremental increase in volume around the launch.

“The best way to create a barrier around your brand is to have ideas rooted in your brand positioning. That makes it awkward for your competitors to copy it,” Edson said.