Molson Coors bringing functional support roles to Milwaukee under revitalization plan

Company cutting 400 to 500 jobs globally

The Miller Valley brewery.

Last updated on March 17th, 2020 at 01:37 pm

Molson Coors Brewing Co. plans to shift functional support roles from several locations around the country to its Milwaukee operations as part of a revitalization plan aimed at streamlining operations, allowing it to move faster and invest in its brands and capabilities.

The plan will cost the company $120 million to $180 million and includes the elimination of 400 to 500 jobs. It is expected to generate around $150 million in savings, the company said.

In 2017, Molson Coors established a global business service center in Milwaukee with 150 jobs, including 65 new positions.

A spokesman said the company would not know the exact number of jobs coming to Milwaukee under the current plan, or if any positions in the city would be among those eliminated, until it is actually implemented. The spokesman did say the number of job in the city would increase.

Milwaukee Mayor Tom Barrett said during a Wednesday press conference the city would add hundreds of jobs under the company’s plan.

“These are white collar jobs that are essentially good paying jobs that we are proud to host here in the City of Milwaukee.”

However, when asked just how many jobs, Barrett didn’t pinpoint a number.

“I don’t have a range and I’m not being elusive,” Barrett said. “Our involvement of course has been based on their assertion to us that they are doing this reconfiguration.”

Barrett said a tax incremental finance district or other grants from the city may be part of the equation, but did not share any details.

“We’ll bring that out when we make the announcement along with the state,” Barrett said.

The company’s 2017 expansion plan in Milwaukee included $2.45 million in state tax credits. None of those credits have been verified by the state and the company has reported just $10,000 in capital investment and no job creation.

The company will also consolidate its 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, starting Jan. 1.

Molson Coors will designate Chicago as its North American operational headquarters and will close its Denver offices.

“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,” said Gavin Hattersley, president and chief executive officer of Molson Coors.

The change eliminates the MillerCoors name, which started with a joint venture formed in 2008. Marty Maloney, a company spokesman, said the Miller name would live on through the company’s brands and many people have continued to referred as Miller Brewing regardless of corporate ownership.

“People called it Miller Brewing when Phillip Morris owned it. People called it Miller Brewing when it was owned by a South African company. We have no doubt that people will call it Miller Brewing for many years. And that’s just fine with us,” Maloney said in an email.

In a call with analysts, Hattersley acknowledged the company’s business performance is lagging. Worldwide brand volumes declined 1.9% from 2017 to 2018 or 1.55 million barrels. After growing 0.2% in 2017, net sales declined 2.1% in 2018.

This year, net sales have decreased 3.1% during the first nine months of the year and worldwide brand volumes are down 4.2% or 2.5 million barrels.

“We’re over indexed in declining segments,” said Hattersley, who took over as Molson Coors CEO in September. 

The idea is to use savings from the revitalization plan to invest in the company’s core brands, including Coors Light and Miller Lite, while also growing its above premium segment to a meaningfully greater percentage of overall volume.

Molson Coors will also look to invest in innovative areas outside of beer as consumer tastes shift to other beverages. The company has already launched a canned wine and a hard coffee this year and has a new hard seltzer and a cannabis infused product in the works.

“You will see us push into these white spaces faster than we have in the past,” Hattersley said, noting the company will look to reduce the time to market for products from 18 months to four months while expanding a test and learn approach to new product development.

He repeatedly told analysts the company would take “more calculated risks” and that the new plan would not force a choice between innovative products and investments in legacy brands.

“We’re not going to have to make the tradeoff decisions that we made in the past,” he said.

The company also plans to change its name to Molson Coors Beverage Co. Hattersley acknowledged it is a small change, but said it “recognizes what’s possible” as the business expands beyond beer.

BizTimes reporter Brandon Anderegg contributed to this story.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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