Miller Brewing Co. is moving into the caffeinated alcoholic beverage market after its parent, SABMiller plc, purchased two brands from McKenzie River Corp. for $215 million.
The Sparks and Steel Reserve brands strengthen Miller’s portfolio with two fast-growing and profitable brands that have grown at triple and double digits respectively, the companies said. Miller plans to keep that momentum going through its marketing, sales and distribution efforts.
“Sparks and Steel Reserve will have an immediate positive impact on our growth profile,” said Norman Adami, president and CEO of Miller Brewing, in a statement.
Miller currently brews both Sparks and Steel Reserve under a contract brewing agreement with San Francisco-based 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.
Launched in 2002, Sparks created the caffeinated alcohol malt beverage segment. Flavored with ginseng, guarana and taurine, the brand is known for its citric taste. Sparks achieved a compound annual growth rate of 107% between 2003 and 2005.
Steel Reserve is a high-gravity lager that is slow brewed for a minimum of 28 days. It is the leading brand in the high-gravity lager category. Sales of Steel Reserve have grown at a 35% compound annual growth rate between 2003 and 2005.
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