At pilot brewery, MillerCoors learns what new beers will fly

MILWAUKEE – MillerCoors' Milwaukee brewery is an industrial powerhouse, capable of producing up to 8.5 million barrels annually of Miller Lite, Coors Light and other well-known brands.

But within the company's complex here, there's a much smaller, separate operation that's more akin to a laboratory — where the experiments include chocolate lager, a beer using hops with a pineapple aroma, and a new hard cider seeking to differentiate itself within an increasingly crowded market.

Welcome to the MillerCoors pilot brewery, and its recently expanded conference and tasting room where the company works on new ideas. That conference space is dubbed the Flying Hippo room, and will soon include focus groups conducted with people recruited from the main brewery's tours.

"It's where big ideas fly," said David Ryder, vice president of brewing, research, innovation and quality, in explaining the Flying Hippo moniker.

Flying Hippo and the pilot brewery are key parts of the company's creative efforts, said Manny Manuele, director of technical innovation and development.

"It's really an experiment intended to be a little bit distant" from the rest of MillerCoors' Milwaukee operations, which include corporate offices, Manuele said.

"This is our sandbox," he said.

There are two mini-brewhouses that each can produce a batch of up to 40 liters, or about one-third of a barrel.

"It's really useful," Ryder said. "You can do a lot of quick stuff here."

Those small batches allow MillerCoors to test a wide variety of hops and barley malts, Ryder and Manuele said.

The large number of experimental brews inevitably means a lot of the results are tossed, and never progress to the next stage of development. That includes a small batch of beer inspired by Ryder's encounter with hops that had a pineapple aroma.

"We brewed it," Ryder said. "And it tasted terrible."

That was done in 2005 with Temptation Bock, a chocolate beer. That brew was later renamed Frederick Miller Classic Chocolate Lager, and during the 2006 holiday season was sold in Wisconsin, as well as Chicago, Minneapolis and a few other Midwestern cities.

Ryder would love to see its revival.

"But it's a question of what our marketing colleagues think would have the best possibility of being successful," Ryder said.

Meanwhile, there's the new Flying Hippo space, which includes a tasting bar with beers on tap, conference rooms and an area to view proposed TV ads.

It's designed as a place where MillerCoors brewers can meet with their marketing colleagues, as well as hops and barley suppliers, wholesale beer distributors, advertising agency representatives and others to brainstorm.

Those drinkers will sample "works in progress," Manuele said. Their comments can then be used to make possible changes to the recipes, he said.

The higher-priced specialty and craft brands, which include the ciders and the Leinenkugel's beers, are a growing portion of MillerCoors' overall business.

But mainstream beers, such as Miller Lite, Coors Light and Miller High Life, still play a huge role at Chicago-based MillerCoors. MillerCoors is a joint venture owned by London-based SABMiller PLC and Molson Coors Brewing Co., with corporate offices in Denver and Montreal.

MillerCoors recently reported its third quarter financial results, with underlying net income of $376.7 million on revenue of $2.07 billion. The company's higher revenue and earnings came despite a sales volume drop for its larger brands, thanks in part to its higher-priced brands, including Smith & Forge and Leinenkugel's Summer Shandy.

The company's strategy is to continue to develop those higher-priced brands, while also reviving its largest brands, Chief Executive Tom Long, said in a statement.

"There might not be a market today," Manuele said. "But someday, eventually, someone will ask for it, and we'll be ready."