FDBusiness.com

Molson Coors Brewing Company has announced a new revitalisation plan intended to achieve consistent top-line growth by improving efficiency and unlocking resources to reinvest in the business.

“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,” explain Gavin Hattersley, president and chief executive of Molson Coors. “Our revitalisation 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 revitalise Molson Coors, achieving consistent top-line growth by enabling the group 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,” he says.

Investing in the core, growing above premium and expanding beyond beer

Gavin Hattersley.

Molson Coors has shown it can improve the performance of its iconic brands and can stabilize brand performance and position for sustainable growth – by accelerating investments behind the largest brands in its portfolio, by focusing on recruitment especially of new legal age drinking consumers, by driving relevance with breakthrough marketing, and by innovating on core brands to attract legal age drinkers. The company will invest significantly 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. 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 will also 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 US and expanding a “test and learn” approach that evaluates market potential for products and then quickly scales up.

Investing in capabilities, systems and people

As part of the revitalisation plan, the company will also invest in improving its digital capabilities, expanding data resources and building out innovation systems. This will better enable precision marketing and improve e-commerce abilities. New investments in leadership and growth opportunities for employees will help build an inclusive culture and diverse workforce.

Separately, Molson Coors will continue its ongoing efforts to modernise its brewery footprint and will also invest several hundred million dollars to modernise its brewery at Golden in the US. These plans will allow for more flexible capacity to better meet demand and fulfill future growth opportunities, while increasing supply chain efficiency.

Streamlining

To make the new investments possible, Molson Coors plans to unlock approximately $150 million in savings by simplifying its structure. The company will move from a corporate centre and four business units (MillerCoors in the US, 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 United States, Canada and corporate center, enabling the company to move much more quickly with an integrated portfolio strategy. 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 more effectively 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 not be effective until January 2020 and therefore the resulting financial reporting changes will not be reflected until our first quarter of 2020 results.

Reduced office footprint

To further drive efficiency and enable growth, Molson Coors is consolidating and reorganizing office locations. The Denver office will be closed and Chicago will be designated as the North American operational headquarters. Functional support roles currently housed in several offices around the country will now be based in Milwaukee, Wisconsin.

As a result, Molson Coors expects to reduce employment levels by approximately 400 to 500 employees as part of this restructuring, primarily in the existing United States, Canada and International reporting segments, as well as Corporate.

New senior leadership

The company will also consolidate the Global, MillerCoors, Canadian, and MCI leadership teams into one team to streamline decision making. As Molson Coors moves to a North America and Europe structure, there will no longer be a President of the US business.

The company will also change its name to Molson Coors Beverage Company to better reflect its strategic intent to expand beyond beer and into other growth adjacencies. The company will legally change its name starting in January 2020.