Molson Coors said the revitalization plan will help the company expand beyond beer, a goal achieved through consistent growth, improved efficiency and reinvesting in the business. By “eliminating duplication, shedding what’s not working and restructuring the organization,” Molson Coors will better succeed in the current competitive, fast-paced beverage environment.
The company will also change its name to Molson Coors Beverage Company (from Molson Coors Brewing Company), legally effective in January 2020. It said this will better reflect its “strategic intent to expand beyond beer and into other growth adjacencies.”
From four business units to two
Molson Coors wants to bring new beverages to market faster and with more precision, starting by expanding its model that has reduced the time it takes to bring innovations to market from 18 months to as little as four months in the US.
The company will also invest several hundred million dollars to modernize its brewery in Golden, Col. and increase supply chain efficiency.
Gavin Hattersley, president and CEO of Molson Coors, said “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. 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.”
However, the company is closing its office in Denver, and a new office in Chicago will serve as the North American headquarters. Functional support roles that are currently in several locations will now be moved to Milwaukee.
“We expect to reduce employment levels by approximately 400 to 500 employees as part of this restructuring, primarily in our existing United States, Canada and International reporting segments, as well as Corporate,” Molson Coors said.
The company will consolidate the Global, MillerCoors, Canadian, and MCI leadership teams into one team to streamline decision making. There will no longer be a corporate center and four business units (MillerCoors in the US, Molson Coors Canada, Molson Coors Europe and Molson Coors International), but rather two business units – North America and Europe.
The Latin America business will report into the North America business unit and Africa and Asia Pacific will report to Europe. This will all take effect in January 2020.
Growth in premium and audience recruitment
Molson Coors plans to invest in its iconic brands while growing in the premium space, and expand beyond beer without sacrificing support for its existing beer brands. Net sales revenue for Q3 was down by 3.2% versus last year.
Its worldwide brand volume and financial volume decreased 2.4% and 5.5%, respectively. Molson Coors said this was a result of declines in all segments and challenging industry dynamics.
"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,” Hattersley said.
“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.”
In its largest beer brands, the company will focus on recruitment of new legal age drinking consumers, driving relevance with breakthrough marketing and innovating on core brands to attract new customers.
‘Above premium’ is the fastest growing area of the beer industry, Molson Coors said, and it is putting attention on the category with new acquisitions and launches of trendy drinks like hard seltzers and coffees, and new pack formats like canned wine.