A sign that craft beer is the growing sector of the American beer market comes with the news that MillerCoors is to invest in its Leinenkugel brand. Leinenkugel is based in Chippewa Falls in Wisconsin. It has German immigrant origins and dates from the 19th century. It was a leading independent brewery until it was bought by MillerCoors, the second biggest brewer in the U.S.
MillerCoors is a merger between the two breweries. Confusingly, Coors oeprates in Canada as MolsonCoors and in Britain is still known simply as Coors.
Jake Leinenkugel, head of the Wisconsin brewery, said MillerCoors has invested around $10 million in the past seven years: "That's incredible for a brewery of our size."
The investment in both brewing capacity and marketing is aimed at increasing the company's share of the American beer market, which is led by the Brazilian-Belgian conglomerate AB InBev. The formation of Miller and Coors was driven by the need to cut into Anheuser Busch's market share: AB owns the biggest beer brands in the U.S., Budweiser and Bud Light.
Leinenkugel represents part of MillerCoors' efforts to break into the craft beer market. This makes up just 3% of the total Aemrican beer market but represents an important element of the MillerCoors portfolio.
"The fastest growing part of the beer business today is the top end -- the craft end," MillerCoors chief executive Leo Kiely said. "They are the most expensive brands on the shelf but value is determined in a different way."
In Chippewa Falls, the brewery has the capacity to double brewing but needs additional fermentation vessels.
MillerCoors has already moved into craft brewing with the Coors' Belgian-style wheat beer, Blue Moon. This is now the second biggest-selling craft beer in the U.S. and featured in President Obama's recent "beer summit" in the White House.