The restructuring plan announced recently by Molson Coors is big news for Milwaukee because the company will move hundreds of jobs here.
However, we shouldn’t ignore the fact that this company is in decline and is at a crossroads, which is why the restructuring plan is necessary.
“Our business is at an inflection point,” said Molson Coors president and CEO Gavin Hattersley. “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 is a massive company. It is ranked No. 294 on the Fortune 500 and last year had net income of $1.1 billion and sales of $10.8 billion. However, its profits were down 28.7% last year and sales were down 2.1%. In the third quarter of this year, the company reported a loss of $403 million. Its net sales for the quarter were down 3.2%.
Molson Coors produces dozens of beer brands, including the Miller brands, the Coors brands, Leinenkugel’s and Blue Moon.
The big legacy brewers have been in decline for years as consumer tastes have shifted in favor of craft beers from small producers.
But now an even bigger shift is happening: younger consumers are turning away from beer in favor of hard seltzer. The biggest beneficiaries of that trend have been Chicago-based White Claw and Boston Beer Company’s Truly brand.
Other alcoholic beverage producers are trying to play catch up in the hard seltzer market. Molson Coors has its Henry’s Hard Soda brand, but its market share is small. The company plans to add a new hard seltzer brand, Vizzy, next year. With so many millennials shunning beer in favor of hard seltzers, Molson Coors needs Vizzy to become a hit.
Vizzy is not the only new drink Molson Coors is working on. A joint venture of Molson Coors and HEXO Corp. recently announced plans to launch six cannabis beverage brands in Canada.
As the company pursues these non-beer brands to grow its business, it’s not surprising that it is changing its name from Molson Coors Brewing Company to Molson Coors Beverage Company.
Expanding “beyond beer” is one of four goals identified in the company’s revitalization plan. Another goal is to grow its above premium brands, such as Blue Moon, while still investing in its most iconic brands, including Coors and Miller.
To accomplish these goals, the company says it needs to restructure. It will consolidate its operations, which includes making Chicago its North American headquarters and adding hundreds of white-collar “support role” jobs in Milwaukee.
After Milwaukee lost the Miller Brewing headquarters when the MillerCoors joint venture was formed in 2008, the vacant office space left behind became an attractive option for Molson Coors to consolidate its operations here.
Hopefully the company gets moving in the right direction and continues to grow its presence in Milwaukee.