EVENT AT A GLANCE Objective: Regain the personal trust and business commitment of the Miller distributor network. Strategy: Commit to redefining the Miller-distributor relationship as a strategic partnership rather than a transactional arrangement. Tactics: Remodel the annual distributor conference from bare-bones “information dump” to an immersive and unified brand experience, focused on communicating long-term strategies. Results: Event attendance up 40 percent; company jumped from No. 6 in 2003 to No. 2 in 2004 in a Tamarron Consulting beverage-industry wholesaler study.

n information dump.” That’s how those who attended Miller Brewing Co.’s annual distributor conference before 2004 described the event.

Back then, the event featured business sessions typical of most corporate conferences, such as high-level overviews of Miller’s current performance and short-term strategies, and previews of forthcoming marketing and advertising campaigns. Informal tastings of new and existing Miller brands were commonplace, and every other year, the company hosted “Miller Main Street,” an expo where industry vendors were invited to showcase their wares.

“There wasn’t much to it,” says Kelly Massey, managing partner at VWV USA in Grapevine, TX, which works with Miller on U.S.-based events. Miller distributors casually came and went as they pleased, attending presentations in a very “elective” way, adds Mark Steinhobel, founder and president of VWV USA’s parent company, Johannesburg-based VWV Group (Pty) Ltd., which began producing the dealer conference in 2004. “Although there was a central plenary room, during sessions there was a constant stream of traffic in and out of the room. There was never a sense of the distributor body being welded or held together in a way that would encourage relationships to form.”

On the Rocks

A struggling distributor event wasn’t the biggest problem Miller faced in 2004. At that time, “the relationship between Miller and its distributor partners couldn’t have been worse,” says Nehl Horton, senior vice president of communications and government at Miller. “Many had given up on Miller based on the assumption that the brand was in a continuing decline.”

That decline was marked by close to 15 years of decreasing sales, eroding market share, and frequent management upheaval (11 different CEOs rotated in and out of Miller’s executive suite between 1989 and 2004). Actions by Miller’s long-time parent company, Philip Morris Cos. Inc. (now Altria Group Inc.), had also taken a toll, as Philip Morris focused its efforts and resources on managing growth and tending to legal issues within its larger tobacco and food-products businesses. And since Miller accounted for only 4 percent of the company’s overall revenues, by 2003, it was on the rocks. Miller’s No. 2 spot in the light-beer category had been taken over by its top competition, Molson Coors Brewing Co., and its slice of the beer industry had dropped from 23 percent in 1994 to only 17 percent in 2003, according to BusinessWeek magazine — a 26 percent decline.

Distributors struck back. Lacking confidence in Miller’s leadership and in the long-term viability of the brand, many who once built their entire businesses around Miller products began diversifying their portfolios to include brews from competing companies.

For Miller, it was a disaster in the making. “Our distributors drive our sales, period,” Horton says. “The beer business is all about buzz and momentum. People want to see, feel, and be confident that you are winning. When they do, that drives momentum and action in their own businesses.”

The New Guard

Miller’s chance to regain its historic momentum came in 2002, when Philip Morris sold a majority stake in the business to South African Breweries (SAB) PLC, the second-largest bottler in the world, to form SAB Miller PLC. Shortly thereafter, in February 2003, Norman Adami, head of SAB’s South African operations, was appointed CEO of Miller Brewing Co.’s U.S. operations. When Adami arrived in Milwaukee to take the reigns of the floundering brand, he did so with one goal in mind: to turn the company around and make Miller an undisputed industry contender once again.

Adami immediately got to work re-establishing a Miller culture. Out went extra offices in the company’s Milwaukee headquarters; in came an employee pub. Out went underperforming marketing and ad campaigns; in came new programs with clear brand segmentation. And, most important, out went business as usual with the distributor network.

Adami spearheaded a broad, multi-million-dollar push to support the distributors’ local marketing efforts. He worked tirelessly to mend distributor relationships, going so far as to place a number of the company’s more than 2,500 U.S. distributors on speed dial and check in with them regularly about goings-on in their individual markets.

The Tough Road Ahead

Still, if Miller really wanted to convince its distributors that the “new Miller” under SAB and Adami was the real deal — and not just another unwelcome knot in a 15-year string of failed turnaround attempts — Adami and his team knew that the annual distributor event was the place to do so. “The event is the one opportunity for the CEO to gather all of the distributors, place a stake in the ground, and redefine the relationship,” Steinhobel says.

To ensure the 2004 event allowed Miller to do just that, Adami tasked David Goulet, Miller’s vice president of sales services, to travel to South Africa to see how SAB executed its own distributor conference.

When Goulet stepped onto the SAB conference floor, two things jumped out at him. “One was a relevant and timely theme — a cohesive theme that transcended everything going on at the event and tied it all together,” he says. “The second was the energy level with the audience itself. It was something that I, in 20 years at Miller, had never seen. I thought, ‘If we can get half of that, it will be a huge improvement for us.’”

Strategic Reinvention

Determined to replicate what he witnessed overseas, Goulet teamed up with VWV and got to work reinventing Miller’s U.S. distributor conference for the 2004 event.

Conventional wisdom under Miller’s old regime held that distributors — high-powered, accomplished individuals running multimillion-dollar businesses who often flew to the conference in their own jets — were business-savvy and “had been there, done that,” Steinhobel says. “The feeling was that Miller needed to respect their individuality and not tell them what to do, and that any attempt to introduce touchy-feely elements to the event would be inappropriate.”

Interestingly enough, when Miller began talking to its distributors and asking them what they actually wanted out of the annual distributor conference, it found the exact opposite to be true. As Steinhobel observed, “They were desperate for some form of relationship. There had been a long succession of CEOs, and they wanted to know that they were in a partnership and could trust someone. They were yearning for consistent, reliable, trustworthy leadership.”

The first step toward creating that relationship was to ensure that every element of the 2004 event served Miller’s core business objectives of increasing distributor confidence in and loyalty to the Miller brand, and convincing them that investing in Miller over the long-term “could form the bedrock upon which to build their businesses,” Goulet says. “We wanted them to walk away saying, ‘I have confidence in Miller’s strategy and leadership to deliver a portfolio of beer brands that allows me to compete in each segment of the American beer industry. Therefore, when I am deciding whether I should send my sales force out to get more placements for Heineken (a competing brand) or Peroni (a Miller brand), I will choose Peroni. If I have a chance to place Blue Moon (from Coors) or Leinenkugel’s (from Miller), I will put more emphasis on Leinenkugel’s.’”

From Info Dump to Immersive Brand Experience

The result was a new kind of event, which debuted in New Orleans in March 2004. Every element of the conference, from keynotes to business sessions to informal networking and beyond, was united around a common theme that served the company’s strategic objectives for the coming year. In 2004, that theme was Passion, which Horton says signified the need to reignite passion in Miller and its brands.

That passion was readily apparent to attendees on day one, when Adami took the stage and explicitly asked distributors for a new relationship, then went to great lengths to define what that relationship would look like. “Adami really set the stage for a partnership,” Steinhobel says. “He let them know that at each meeting, we were no longer just going to tell them about our new television commercials and set designs. Each conference would become the beginning of a year-long journey that Miller and its distributors would take together, and a place where a major commitment would be made from both sides.”

Distributors welcomed him with open arms. By the time Adami passionately asked, “Are you with me?” over and over again on the last day of the three-day event, distributors were most definitely with him, and they voiced their enthusiasm by giving him a rousing standing ovation.

Adami (who was promoted to president and CEO of SABMiller Americas in August 2006 and was replaced as CEO of the U.S. operating group by his No. 2, former chief marketing officer Tom Long) is known in beer circles for his big personality and strong business sense, but his charisma doesn’t deserve all of the credit for igniting the passion evident throughout the 2004 event. Months before the conference took place, VWV used a proprietary tool it developed with Miller, called the Emotional Response Graph, that mapped out the distributor response Miller sought to achieve over the course of the three-day conference and the response that each event activity it planned likely would elicit. “It is a scientific tool that maps out the emotional component we attach to information presented at the conference and charts the roller-coaster ride we will take attendees on,” Steinhobel explains. “It focuses on how we are going to make attendees feel, not just on what we are going to make them know.”

For instance, remember those high-powered distributors who supposedly eschewed anything even remotely touchy-feely? When Miller introduced a black-tie gala and awards banquet in 2004 and handed out its first-ever Miller Legend Award, which recognizes distribution-company owners and officers who have carried Miller products for at least 30 years, it was astounded by the response. “It struck a sentimental note that none of us were aware existed,” Goulet says.

While distributors appear to be wealthy and accomplished, he adds, most are family-owned businesses that have been passed down from generation to generation. “We all knew there was pride there, but it struck more deeply than we realized. The honorees were deeply touched, and it showed the entire distributor body that we understood some of the non-financial drivers that keep them passionate about this business.”

Networking for the cause

In addition to the awards ceremony, Miller took several other steps to demonstrate how much the company valued its distributors. Recognizing that forging a meaningful relationship with distributors couldn’t be accomplished from the podium alone, for example, the company called upon Miller employees at the event to capitalize on every available opportunity to network with distributors. “They were briefed in advance that we needed them to act as hosts to our distributor guests,” Goulet says. “We explained how they should interact with our guests and how to treat them as such.”

To aid Miller staff with their hosting duties, Miller assigned different-colored lanyards to its employees and to distributors, then encouraged Miller personnel “not to congregate with people of the same-colored lanyard,” Goulet says. Miller also instituted a large-scale employee awards ceremony and event briefing the day prior to the distributor conference to prepare staff for the event, generate excitement, and present management’s goals and expectations.

This focus on staff involvement marked a dramatic departure from Miller’s approach to distributor relations at the event in years past, Steinhobel notes. “For decades, Miller employees attended the event and enjoyed it immensely, but were accustomed to acting more like guests than anything else and tended to hang together instead of mixing with distributors as much as they should have.”

In 2004, Miller made its distributors feel like VIPs by increasing the emphasis it placed on the event’s logistical details “by a factor of four or five,” Goulet says. Previously casual commitments to starting and ending sessions on time, ensuring timely food and beverage service, and providing comfortable and reliable transportation were ratcheted up to mandates. “It’s very important for distributors to be confident in our ability to move the business forward,” he explains. “Business competence is an important part of that. Our objective was to demonstrate to our audience competence in everything that we do.”

The Miller Time Tavern

Miller further underscored its ability to move the business forward with presentations from senior SAB operations executives that demonstrated their commitment to the brand, and outlined the company’s short- and long-term vision. “In this industry, where consolidations, acquisitions, and divestitures are rampant, if we want to be considered the long-term, critical supplier to our business distributors, they need to understand that our parent company has a long-term, committed relationship with Miller and the U.S. beer market,” Goulet says. “By having people from our headquarters in London and elsewhere come to the event, we showed distributors that these are 100 percent beer people and 100 percent committed to the U.S. beer market.”

That commitment also was exemplified by Miller brand managers, many of whom gave presentations detailing how their brand intended to move forward to achieve one of Adami’s core turnaround strategies: staking out distinct market segments for each of Miller’s core brands.

The presentations’ content was underscored by the debut of The Miller Time Tavern (now called “The Brand Experience”), a sprawling, informal networking environment made up of seven distinct sets that immersed distributors in each of Miller’s core brands. Each set, according to Steinhobel, encapsulated the look, feel, tastes and sounds of each brand, and evoked the type of environment in which it would most likely be consumed.

For example, the set for Icehouse, a brand that Miller positions as the beer for young guys to drink before going out on the town, was a sports-inspired tailgate party. A pickup truck and tents were parked on a faux-grass-covered 60-by-100-foot space, while MAXIM magazine, one of Icehouse’s official sponsors, brought in models dressed in cheerleader outfits. Big-screen TVs televised football games, and tailgate staples such as hot dogs and hamburgers were grilled for hungry attendees.

By contrast, the set for Miller High Life, which is targeted to accomplished men in their 30s and early 40s who enjoy a cold brew while hanging out with the guys in a laid-back bar environment, featured an antique 40-foot oak bar with back mirrors and backlighting, plasma TVs, and a jukebox blaring favorite tunes.

While The Miller Time Tavern proved an ideal venue for entertaining and informal networking, its main objective was all business. “At that point in time, we were defining each of the brand positions, including each brand’s consumer, and what would evoke the brand meaning for each consumer,” Goulet says. “We were asking distributors to become local brand builders. We wanted them to know that they would play an important role in ensuring that the look and feel of each brand was on display in their retail outlets. The Miller Time Tavern gave them a live example of what we had presented to them in the general-session room and showed them the right way to do it. The Tavern served as a living example of the Miller brand, and the message for distributors was that when they are out there promoting these brands and these beers in their market, this is the brand’s personality and this is how you want to promote it.”

Back on Top

Since the 2004 relaunch, Miller has worked year after year to improve the event and ensure that the conference continues to strengthen relationships and deliver value to distributors. After each event, for example, the conference team pores over the results of attendee surveys to determine which event elements need to be tweaked, changed, or canned the following year. One example? “We have heard from distributors that they would like us to become even more focused, and deliver what they need to know in a way that minimizes time away from the office,” Steinhobel says. So, the 2008 event in New Orleans will be cut down from three days to two days, and all general business sessions, with the exception of guest keynotes, will be limited to 30 minutes.

The conference team also puts care into selecting a theme for each year’s event that will serve the company’s business strategy and unite everyone around a common set of goals. In 2005, for example, when one of Miller’s primary objectives was to challenge Anheuser-Busch Cos. Inc.’s market dominancy, the theme was Challenge. When Anheuser-Busch retaliated and attempted to undermine Miller’s ploy by slashing its pricing, the theme for the 2006 event became Game On. And in 2007, Go Get It! served as a rallying cry for everyone at the event to sally forth into the marketplace and get what now is theirs for the taking.

The Results Are In

The care and attention that Miller now lavishes on its distributors and the event has paid off in a big way. Its newfound success is perhaps best exemplified by the performance of Miller Lite, which is considered the company’s flagship brand and premier growth engine. By the end of 2004, Miller Lite was the fastest-growing brand in the American beer business and reclaimed the No. 2 spot in the light-beer category that it had previously ceded to Coors. The brand’s success continued in 2006 (when it enjoyed double-digit growth and picked up a full market-share point), and in 2007, when production volume hit three million barrels more than in 2004 — a 7-percent increase over 2004’s 18-million barrel production.

The event is also turning around distributor attitudes toward Miller, which announced a merger with Molson Coors in October 2007. Surveys conducted after each conference show a dramatic shift in distributors’ perception of the Miller brand and Miller management, Horton says. “After four years, we’re seeing significant increases in distributors’ confidence in our leadership team, significant increases in distributors’ confidence in our strategy, and significant increases in the long-term confidence level that distributors have in Miller as a business partner.” That shift also is reflected in attendance, he notes, which shot up from only 2,000 attendees in 2002 to 2,800 attendees in 2007.

These are significant dividends for a renewed investment in distributor relations and engagement. “This has become a real ‘sales’ conference in that we are selling our strategy to our business partners,” Horton says. “And whereas the overall sense used to be that Miller was losing, the overall sense now is that Miller can win.” e