CANADA – Molson Coors Brewing Company, has unveiled a company-wide restructuring strategy aimed at streamlining the brewers operations and rejuvenate its growth after further diving into a loss during its latest quarter.
The Canadian beverage firm reported a 3.2% decline in sales during its third quarter and a net loss of US$403 million driven by Canadian goodwill impairment charge while underlying EBITDA decline by 5.6% to US$703 million.
The company said that the performance was negatively affected by rapidly shifting drinking preferences and other alcoholic and non-alcoholic beverages causing beer to lose business.
Following the performance, Molson Coors has announced a new revitalization plan intended to achieve consistent top-line growth by improving efficiency and unlocking resources to reinvest in the business.
Molson Coors will reorganize its corporate structure into two business units; North America and Europe, from four previous business units; MillerCoors in the U.S., Molson Coors Canada, Molson Coors Europe and Molson Coors International.
The company said that the North America business unit will consolidate the US, 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.
To further drive efficiency and enable growth, Molson Coors is consolidating and reorganizing office locations and will be closing the Denver office while 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, a move that is expected to reduce employment levels by approximately 400 to 500 employees,
The change in structure to two business units scheduled to become effective in January 2020.
The changes are expected to unlock approximately US$150 million, which the company said will enable it to invest in improving its digital capabilities, expanding data resources and building out innovation systems to better enable precision marketing and improve e-commerce abilities.
Molson Coors said it will will also continue its ongoing efforts to modernize its brewery footprint and will also invest several hundred million dollars to modernize its brewery in Golden, CO.
These plans will allow for more flexible capacity to better meet demand and fulfill future growth opportunities, while increasing supply chain efficiency.
Markedly, the company will also change its name from Molson Coors Brewing Company to Molson Coors Beverage Company “to better reflect its strategic intent to expand beyond beer and into other growth adjacencies.”
President and CEO of Molson Coors, Gavin Hattersley said: “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.
“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.”
