Welp, Peter Frost let us know today that Molson Coors is shaking up its business. First off, the company’s changing its name to Molson Coors Beverage Co., as it wants to shed that MillerCoors partnership venture vibe and get into non-traditional beer products. The company is also consolidating from four to two business units in an attempt to streamline operations. Its U.S. business (MillerCoors), Latin America business and Molson Coors Canada will now form one North American business unit, and the company will fold its Molson Coors International group into Molson Coors Europe. The name MillerCoors shall no longer be used, so it is decreed.
Molson Coors will also close its Denver office and make Chicago its North American commercial headquarters. The big MC also expects to cut between 400 and 500 salaried positions in this entire process, primarily in North America and from Molson Coors International, so there will be some beer professionals out there looking for new jobs.
From the Frost story:
[Molson Coors President and CEO Gavin] 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.
“MillerCoors” has lost significant market share over the last 10 years plus, going from controlling 29.4 percent market share of the American beer market in 2008 to 23.5 percent in 2018, according to the smart folks at the National Beer Wholesalers Association. With this announcement, Molson Coors also shared its third quarter financials, which included the likes of:
- Net sales: $2.8 billion, decreased by 3.2% and 2.0% in constant currency driven by volume declines, partially offset by net sales per hectoliter growth.
- Volume: Worldwide brand volume and financial volume decreased 2.4% and 5.5%, respectively, due to declines in all segments, partially driven by challenging industry dynamics. Financial volume was further impacted by quarterly timing of customer inventory levels in the U.S. and Canada, as well lower contract brewing volume.
- Cost of goods sold (COGS) per hectoliter: on a reported basis, increased 4.1% primarily driven by inflation and global volume deleverage, partially offset by lower unrealized mark-to-market losses on our commodity positions as compared to the prior year, foreign currency movements and cost savings.
Beer in general as a category is declining overall, so Molson Coors is talking new growth strategy, which is focused heavily on premier beer offerings, beyond beer and new digitized business tactics. From the press release:
The plan aims to revitalize Molson Coors, achieving consistent topline 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.”
Molson Coors announced it will also continue its ongoing efforts to modernize its brewery footprint, investing several hundreds of millions of dollars in its brewery in Golden, Colo. There’s also a new leadership team (view here).
What about those new products specifically from Molson Coors?
From the Frost article:
[Molson Coors] 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.