In addition to reporting its 2019 third quarter results, Molson Coors Brewing Co. has revealed what it calls a “revitalization plan” to facilitate growth, improve efficiency and “unlock resources” to reinvest in the business.
One way the company is unlocking resources is consolidating and reorganizing office locations. The Denver, Colorado, office will be closed, and Chicago will become the company’s North American operational headquarters. Functional support roles currently housed in several offices around the country will be based in Milwaukee, Wisconsin. With these changes Molson Coors expects to cut 400-500 employees as part of this restructuring, primarily in its existing U.S., Canada and international reporting segments, as well as corporate.
It also will change its name to Molson Coors Beverage Co. in January to better reflect its strategic intent to expand beyond beer and into other growth adjacencies.
“Our business is at an inflection point. 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,” said CEO Gavin Hattersley. “Our revitalization plan is designed to streamline the company, move faster and free up resources to invest in our brands and our capabilities. Through it, we will create a brighter future for Molson Coors.”
“The plan aims to revitalize Molson Coors, achieving consistent top-line growth by enabling us to: 1) invest in iconic brands as well as opportunities to grow in the above premium space, 2) expand beyond beer without having to sacrifice support for larger brands in the company’s portfolio and 3) create new digital competencies for commercial functions, system capabilities for supply chain and capabilities for employees. To make this possible, Molson Coors plans to unlock significant resources by eliminating duplication, shedding what’s not working and restructuring the organization to better succeed in today’s competitive, fast-paced environment,” said Hattersley.
Molson Coors expects savings of approximately $150 million by moving from a corporate center and four business units—MillerCoors in the U.S., Molson Coors Canada, Molson Coors Europe and Molson Coors International—to two streamlined business units—North America and Europe.
The North America business unit will consolidate the U.S., Canada and corporate center, enabling the company to move “more quickly with an integrated portfolio strategy,” the company said.
The Europe business unit will be structured to allow for standalone operations, developed and supported by a European-based team, including a local leadership, commercial, supply chain and support functions. The existing Molson Coors International team will be reconstituted to grow the company’s global brands, with the Latin America business reporting into the North America business unit and Africa and Asia Pacific reporting into the European business unit. The change in structure to two business units will be effective in January.
New senior leadership
The company will consolidate the Global, MillerCoors, Canadian and MCI leadership teams into one team to streamline decision-making. Hattersley’s new leadership team assumes their roles effective Nov. 1.
- 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, CFO
- Fred Landtmeters, president of 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, CMO
As Molson Coors moves to a North America and Europe structure, there will no longer be a president of the U.S. business.
Portfolio plans
Molson Coors plans to accelerate its investments in largest brands in its portfolio, focusing on recruitment especially of new legal-age drinking consumers; by driving relevance with “breakthrough marketing”; and by innovating core brands to attract legal-age drinkers. The company will invest in “above premium,” the fastest growing area of the beer industry, with added investment in existing brands, new innovations and possibly through bolt-on acquisitions where there is a strong business case, the company says. After launching two portfolio firsts in 2019—a canned wine and a hard coffee—Molson Coors will continue to invest more in whitespace opportunities and in growth spaces beyond the beer category.
The company also will put a greater focus on bringing new beverages to market faster and with more precision. This includes expanding the model that has reduced the time it takes to bring innovations to market from 18 months to as little as four months in the U.S. and expanding a “test and learn” approach that evaluates market potential for products and then quickly scales up.
In addition, the company will continue its ongoing efforts to modernize its brewery footprint and invest several hundred million dollars to modernize its brewery in Golden, Colorado. The company is not using the cost savings generated from the revitalization plan to make this previously planned brewery investment possible.
“For nearly 150 years we have brewed great beers in Colorado, and we will continue to brew great beers in Colorado for hundreds of years to come,” said Hattersley “This investment will modernize the brewery to allow for more flexibility, enable us to move with pace and deliver new products to meet changing consumer preferences.”
