MillerCoors to be renamed Molson Coors Beverage Co.
CHICAGO (AP/CBS 58) — MillerCoors will be renamed Molson Coors Beverage Co., effective Jan. 1, as part of the company's restructuring and revitalization plan. The company's plan is aimed at streamlining the organization and reinvesting $150 million annually in its business around the world.
Molson Coors Brewing Co. is also laying off 500 workers worldwide and restructuring its operations as it faces declining beer sales.
The company expects to save $150 million by closing offices in Denver and elsewhere and simplifying its structure. Its four business units — U.S., Canada, Europe and International — will be consolidated into North America and Europe, with other regions reporting to those two.
Chicago will be its North American headquarters. Support functions like finance and human resources that are scattered around the U.S. will now be based in Milwaukee.
Molson Coors says it will save approximately $150 million with the new structure. It will use those savings to improve its digital marketing capabilities and introduce new products more quickly, like the canned wine and hard coffee it unveiled this year. Molson Coors says it has been working on reducing the time it takes to bring new products to market from 18 months to as little as four months in the U.S.
Molson Coors is also continuing its previously announced plan to modernize its breweries and make them more flexible to meet consumer demand. The company's brewery in Golden, Colorado, is the largest in the U.S., brewing up to 10 million barrels of beer each year.
"Our business is at an inflection point," Molson Coors President and CEO Gavin Hattersley said in a statement. "We can continue down the path we've been on for several years now, or we can make the significant and difficult changes necessary to get back on the right track."
Hattersley became president and CEO last month when CEO Mark Hunter retired.
Molson Coors is dropping "Brewing" from its name to emphasize that it makes more than beer. It will become Molson Coors Beverage Co. in January.
Beer sales were up 5% in Asia and Western Europe in 2018 and rose 6% in Eastern Europe, according to Euromonitor. But they were flat in the U.S. as canned cocktails, hard seltzers and craft beers stole share from big brewers. The company's beer brands include Miller, Molson, Coors, Blue Moon, Pilsner Urquell and Foster's. It also makes Henry's Hard Soda.
Overall Molson Coors reported a third-quarter loss of $402.8 million on Wednesday. On a per-share basis, the company lost $1.86. Earnings, adjusted for asset impairment costs and non-recurring costs, were $1.48 per share.
That exceeded Wall Street's expectations, according to Zacks Investment Research. But the company's adjusted revenue of $2.84 billion which fell short of analysts' forecasts.
Molson Coors' sales fell 3% to $8.1 billion in the first nine months of the year.
The company's shares slipped 3.6% to $52.71 in midday trading.
Milwaukee Mayor Tom Barrett held a news conference in response to the announcement. Watch it just below:
Speaker Robin Vos (R-Rochester) released the following statement on the changes:
“I would like to thank MillerCoors for expanding its workforce in Wisconsin and its continued commitment to the state. Governor Evers also should be commended for following through on the income tax credits that Governor Walker and the Wisconsin Economic Development Corporation authorized for the company in 2017. It’s good to see that the governor is beginning to understand the importance of providing incentives to help spur business and job growth.”
Read the entire news release from the company below:
Molson Coors President and CEO Gavin Hattersley this morning laid out a sweeping corporate restructuring and revitalization plan aimed at streamlining the organization and reinvesting $150 million annually in its business around the globe.
The company, which will be renamed Molson Coors Beverage Co. effective Jan. 1, is consolidating to two business units from four. It will combine its U.S. business, MillerCoors, with its Latin America business and Molson Coors Canada to form a North America unit, and fold the remainder of Molson Coors International into Molson Coors Europe.
MillerCoors, its U.S. corporate brand name adopted at the time of the formation of a joint venture in 2008, will be retired.
Molson Coors said it will reinvest savings into its business — with a focus on investing in its core brands, growing its portfolio of above-premium beers and expanding beyond beer.
"Our business is at an inflection point,” Hattersley said, in a statement. “We can continue down the path we’ve been on for several years now, or we can make the significant and difficult changes necessary to get back on the right track.”
The changes he outlined this morning, which include a new corporate leadership team, are “designed to streamline the company, move faster and free up resources to invest in our brands and our capabilities.”
Consolidation of business units
Molson Coors will close its Denver office and make Chicago its North American commercial headquarters.
The move will enable the company “to move much more quickly with an integrated portfolio strategy,” Hattersley said in a note sent this morning to employees.
Most support functions, including finance, information technology, procurement, supply chain, legal and human resources, will be consolidated in Milwaukee. The company will continue to maintain global business services offices there and in Bucharest, Romania.
The Molson Coors International team, meanwhile, will be reconstituted, with its Latin American team becoming part of a new North American Emerging Growth team headed by Pete Marino. Its Asia, Pacific and Africa team will fold under the Europe business unit, which will be led by Simon Cox.
The European unit will be structured to allow for standalone operations developed and supported by a Europe-based team that includes local leadership, commercial, supply chain and support functions.
In total, the company expects job cuts of between 400 and 500 salaried positions, which will come primarily in North America and from Molson Coors International.
Progress, but ‘it’s not enough’
Hattersley, who took over as CEO for a retiring Mark Hunter in late September, said the company has made “encouraging” progress in evolving the company to meet rapidly changing consumer demands. But “it’s not enough,” he said.
“As the world around us rapidly changes and the nature of competition intensifies, our business performance is lagging. We’re over-indexed in declining segments, our core brands have seen years of volume losses, and we haven’t had the resources needed to fully invest behind our innovations,” he said in the note to employees.
Molson Coors said savings will be funneled into investments behind its brands, further expansions in the beyond beer space and new digital capabilities.
Under Hattersley’s plan, “we’ll be able to meaningfully invest across our portfolio, and invest in the capabilities we need to compete in the complex marketplace of today and tomorrow,” he said in the note.
It will continue to pour resources behind big ideas like Coors Light’s “Made to Chill” campaign and Miller Lite’s newly launched “It’s Miller Time” campaign.
It plans to continue investing in the above-premium segment, putting more money behind emerging brands such as Saint Archer Gold, Blue Moon Light Sky, Cape Line and Arnold Palmer Spiked in the U.S., and Coors Slice in Canada.
Molson Coors will pursue beyond beer opportunities, such as a hard coffee and a canned wine in the U.S., a cider expansion in the U.K. and Truss’s forthcoming line of cannabis-infused nonalcoholic beverages in Canada.
Hattersley also said the company will invest in expanding its data resources to bolster its e-commerce abilities and better enable it to more effectively market to an evolving consumer base.
To help him implement his wholesale reimagining of the company, Hattersley today also named a new leadership team:
- Adam Collins, chief communications and corporate affairs officer
- Simon Cox, president and CEO of Molson Coors Europe
- Kevin Doyle, president of U.S. sales
- Brian Erhardt, chief supply chain officer
- Rahul Goyal, chief strategy officer
- Tracey Joubert, chief financial officer
- Fred Landtmeters, president of Molson Coors Canada
- Pete Marino, president of emerging growth
- Dave Osswald, chief people and diversity officer
- Lee Reichert, chief legal and government affairs officer
- Michelle St. Jacques, chief marketing officer
Two longtime executives also will be retiring at the end of November:
- Celso White, who led the construction of two new breweries and Canada and played a key role in integrating the U.S. supply chain into Molson Coors; and
- Kandy Anand, who served as CEO of Molson Coors International and chief growth officer, where he oversaw the company’s entry into central and eastern Europe through the Starbev acquisition and led the company’s efforts to form a joint venture with Truss in Canada to enter the non-alcoholic cannabis beverage market.
At the end of 2019, Pete Coors also will retire as the company’s chief customer relations officer, stepping back from his day-to-day duties at the company. He’ll continue to serve as vice chairman of the Molson Coors board and as an ambassador for the company.
Hattersley praised each executive, and said Pete Coors’ impact on the Molson Coors business and the beer industry “can’t be overstated.”
‘We must change’
The plan Hattersley unveiled today is the product of the move-quickly-and-take-smart-risks approach he brought during his tenure as CEO of MillerCoors.
“In my mind, there is no choice. We must change,” he said. The changes “will put us on the path to achieve consistent top-line growth by enabling us to do things that today simply are not possible.”
Molson Coors’ new aspirations are reflected in the corporate name change to Molson Coors Beverage Company, a change aimed at better communicating its strategic intent to expand beyond beer and into other growth areas.
The new name, Hattersley said, “speaks volumes about who we are and what is possible for our business.
“We cannot and will not wait,” he said at the close of his employee note. “We will move faster and free up resources. We will invest in our brands and in our capabilities. We will regain the glory of our past, and we will create a brighter future for the Molson Coors Beverage Company.”