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Instead of creating new products, some companies rely on package innovations to attract consumer attention. Customers see the new packaging and investigate what appears to be a new product, but then can rely on their existing knowledge about the established brand. New packaging also is cheaper to develop than an entirely new product would be.

Perhaps the most vigorous proponents of this type of innovation are beer companies. The new MillerCoors Home Draft system provides 1.5 gallons of beer that fit in consumer refrigerators, so that drinkers who prefer draft to bottled beer can consume their favorite beverage periodically and in the quantities they need at the time. The Home Draft system keeps beer fresh for about 30 days and is recyclable; the price per ounce is approximately 15 percent higher than that for an 18-pack of the same beer.

Heineken’s 2005 introduction of the DraughtKeg suggested its use for special occasions. Because once it is tapped, the DraughtKeg needs to be finished immediately, sales of the product have tapered off since its exciting initial popularity, though it has become a somewhat common sight at holiday and football parties.

In the bottled beer market, Coors Light pastes on labels that turn blue when the beer inside is cold. Bud Light’s case packages use sports teams’ logos and colors; for example, beer drinkers in Pennsylvania can buy Pittsburgh Steelers–themed cases of beer, and fans of the University of Nebraska’s Cornhuskers can enjoy their beverage from special red-colored cans.

Regardless of these innovations though, one thing remains constant in the beer market: The start of football season means great sales increases. And both Bud Light and Heineken need those increases, because both suffered negative sales growth in the previous quarter compared with the previous year.

Discussion Questions:

  1. Why are beer companies focusing on new packaging innovations rather than new product innovations?
  2. Do you think the Home Draft system will be successful, despite its higher per ounce price?

David Kesmodel, “MillerCoors Tests a Draft-Beer Box for the Fridge,” The Wall Street Journal, July 29, 2009.