The pace of change has picked up at MillerCoors in recent months as the brewer looks to position itself to get to growth. We caught up with MillerCoors CEO Gavin Hattersley to talk about the changes and what MillerCoors needs to do in 2019.
Q: Molson Coors today reported that in the third quarter, MillerCoors posted declining volume while underlying earnings grew. How would you characterize results?
A: We’ve done a lot of things that we can build on, and I would like to touch on those in a minute. But the fact that our volume trend lagged the industry just reinforces our need to take action and make some meaningful changes to get on the path to growth.
Q: What will it take to do that?
A: First and foremost we need to get Coors Light back on track. And we’ll do that by going back to what has always worked for this brand: clearly and proudly standing for what it is, the 'World’s Most Refreshing Beer.' We are going to celebrate what makes Coors Light so special — how it’s cold lagered, cold filtered and cold packaged — in a way that resonates with today’s drinkers. The digital spots we’re running now reintroduce our cold-activated packaging, something we haven’t talked about in some time. People want refreshment — it’s a basic human need — and no beer delivers on refreshment like Coors Light.
And, fortunately, we have a great team that is focused on getting the Coors Family of Brands back on track.
Q: What else does MillerCoors need to do?
A: Well, one thing we’re not going to do is veer from our strategy. We are going to continue to focus on taking share in American light lagers, accelerating growth in above premium and stabilizing economy. A balanced approach is critical because all three segments are important to the category, just as they are to wine and spirits. And we have strong brands in each of them.
But we recognize we need to change how we execute our strategy if we are going to get different results. We need to move faster because the pace of the business is much faster than it used to be. That means moving more quickly than we once might have in order to capitalize on a big opportunity, and be more willing to cut the cord faster if something clearly is not working as planned.
We need to evolve how we connect with consumers as we strive to be first choice, so you’ll see us invest more in digital and online. You’ll also see us get sharper in how we reach Latino consumers.
And we need to significantly up our game in the above premium segment. That means investing more than we ever have against our great brands, and you’ll see that in 2019 as we ramp up our investment behind Blue Moon, make a big push behind Peroni, strengthen support for Sol, roll out Cape Line and much more.
Q: What does the restructuring mean for MillerCoors?
A: Restructurings are never easy. However, it was necessary as our fixed cost base was too high relative to our scale. We needed to align our organization with the size of our business, and we’ve done that. We did offer a voluntary severance program that was greatly appreciated by people across the organization. And now we have greater ability to invest in the brands and initiatives that will get our business back on the path to growth, including big opportunities such as Blue Moon, Peroni and Cape Line. Beyond the financial aspect, we put in place a team structure that enables faster decision making, which should help us be more nimble.
Q: You mentioned that there are things MillerCoors can build on.
A: Yes. Our goal is to be first choice for customers and consumers, and we are not satisfied with where we are. We have our work cut out for us to get on the path to growth.
But we did take some important steps. As mentioned, we changed direction on Coors Light. Miller Lite continues to take share in the premium lights segment and hold share in total beer. We think we can accelerate that performance in 2019 by being bolder in our messaging.
We have the No. 1 new FMB with Arnold Palmer Spiked. We have the fastest-growing Mexican import with Sol. Henry’s Hard Sparkling is gaining momentum. So we’re making the changes we need, and we’re making moves that should position us well for 2019. We’ve had our share of challenges this year, but I am truly excited and optimistic about what we can accomplish in 2019.