Molson Coors today announced a sweeping restructuring and revitalization plan aimed at reinvesting $150 million annually in its core products, above-premium offerings, new innovations in the beyond beer space and digital capabilities.
In order to achieve the savings, Molson Coors is consolidating its business units and office footprint and slashing its workforce.
“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,” Molson Coors president and CEO Gavin Hattersley said in a press release. “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 moves were announced prior to the company’s third-quarter earnings call.
Effective January 2020, Molson Coors will consolidate its corporate center and four business units — MillerCoors in the U.S., Molson Coors Canada, Molson Coors Europe and Molson Coors International — into two business units – North America and Europe.
Molson Coors will also change its named to the Molson Coors Beverage Company in 2020 to reflect the company’s “strategic intent to expand beyond beer and into other growth adjacencies.” The MillerCoors name, which the company adopted following the 2008 joint venture between SABMiller and Molson Coors, will be retired.
As part of the plan, Molson Coors’ Chicago office will become its North American headquarters and the company will close its office in Denver. The company will also move its functional support roles — such as finance, IT, procurement, supply chain, legal and human resources — to its offices in Milwaukee, Wisconsin.
Molson Coors said it expects to cut between 400 and 500 jobs in North America and from its international business unit. The company began making personnel changes on October 28, and the reorganization is expected to be complete by January 1, 2020. The layoffs come a little more than a year after MillerCoors announced it would eliminate 350 salaried positions by the end of October 2018.
Those moves could cost the company as much as $180 million cash and non-cash restructuring charges for employee relocation, severance, retention and transition costs and lease exit costs in Denver. Those costs will be spread through the 2020 and 2021 fiscal years.
Meanwhile, Hattersley’s new leadership structure will take hold on November 1. The new leadership includes:
- 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 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
Under the new structure, Molson Coors will no longer have a president of its U.S. business. In a note to wholesalers this morning, Hattersley wrote that “a significant portion” of his job moving forward will be dedicated to “ensuring our success in the U.S. market.”
According to the MillerCoors Blog, Pete Coors will retire from his role as chief customer relations officer at the end of 2019. Coors, however, will continue to serve as vice chairman of the Molson Coors board of directors and act as an ambassador for the company.
In addition to Coors, two Molson Coors executives, chief supply chain officer Celso White and chief growth officer Kandy Anand, will retire at the end of November.
Molson Coors said all of these moves will allow the company to “invest significantly” existing brands, new innovations and “bolt-on acquisitions where there is a strong business case” in the fast-growing above premium segment. The company cited the successful launches of Movo canned wine and La Colombe Hard Cold Brew coffee beer in 2019 as the type of future “whitespace opportunities” it is seeking in the beyond beer space.
Molson Coors also plans to bring new beverages to market faster. The company said it has reduced the time to get new products to market in the U.S. from 18 months to as little as four months. The company is also expanding its “test and learn” model that evaluates the potential for offerings and then allows the company to quickly bring them to scale.
In addition to the $150 million reinvestment into its brands and business, Molson Coors said it will invest “several hundred million dollars” to modernize its production brewery in Golden, Colorado.
“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,” Hattersley said in the release.