CEO Hattersley says Molson Coors is 'laying the foundation to fundamentally change our portfolio’
In his first few months on the job as CEO of Molson Coors, Gavin Hattersley hasn’t shied away from making difficult decisions in his quest to get the company back on track.
CEO Hattersley says Molson Coors is 'laying the foundation to fundamentally change our portfolio’
by Peter Frost
He designed and is ushering the company through a massive restructuring and revitalization program announced in October aimed at streamlining the organization and reinvesting $150 million annually in its business around the globe.
In November, Molson Coors said it took a significant minority equity investment and entered into a long-term partnership with non-alcohol beverage creator and incubator L.A. Libations. That deal gives the company a much stronger foothold in the emerging non-alc space, which Hattersley views as critical in the years ahead.
Then days ago, the company said it would cease production at its Irwindale, Calif., brewery by September and signed an agreement with Pabst Brewing Co. granting Pabst an option to purchase the facility.
And he’s not finished yet. Hattersley says the company has big plans to win back drinkers with new innovations, new marketing campaigns for core brands and continued investments behind products with momentum, such as Peroni Nastro Azzurro.
The company already launched a new campaign for Miller64 and is out with the next phase of Miller Lite’s “It’s Miller Time” campaign, which included the launch of limited-edition Miller Lite Offline Cans.
His overarching goal is to get Molson Coors back to growth by transforming its portfolio of above-premium brands, bolstering its all-important core brands and building more products in adjacent categories, such as non-alcohol and cannabis.
Hattersley spoke with "Behind the Beer" this week to discuss his plans for the new year.
Q: What do you hope is the biggest takeaway from 2019, and what should people expect to see in 2020 from Molson Coors Beverage Company?
A: We set Molson Coors Beverage Company on the path to future success. We did the hard things necessary to get us on that path in 2019. We made tough choices, but they were the right ones. There’s a lot of hard work to be done as we work through our revitalization plan. We’re laying the foundation to get our top line to growth and to fundamentally change the shape of our portfolio.
Q: You’ve got a new team and a new corporate structure. What will that mean for the business?
A: I think there’s going to be way more focus. We’ve consolidated to just two business units. We’re going to be much quicker from a decision-making process point of view. The lines between the required decision and decision-maker are going to be much shorter. You’ll see that contribute quite significantly to us moving much faster than we have before, and we will take a bit more risk than we ever have before.
Q: The revitalization plan was designed to free up more money to invest across the organization. What are your plans for that in 2020?
A: We’re going to be able to put the right amounts of money behind our brands. We’re not going to have to make as many difficult choices as we have before. We’re going to be able to adequately fund all of our innovations, and we’re going to be able to do that without taking money away from our core brands.
Miller Lite and Coors Light are certainly going to get increased investment, as both brands continue to gain traction.
And it allows us to continue on a path in Europe that’s proven successful in driving growth in our above-premium portfolio. Our European business has done a great job changing the shape of their portfolio, and with more firepower I’d expect that to accelerate.
Q: How would you characterize Molson Coors’ performance in 2019?
A: It was a very disruptive year. From a Molson Coors point of view, I think we’ve now set ourselves on the right path to be successful moving forward. We’ve set ourselves up on a really good wicket to drive growth in the above premium. And we’re moving into non-alc beverages with L.A. Libations, which I think is going to be very rewarding. I think we’ve got some real exciting potential brands there.
I think 2019 will be remembered as the year the beer industry started to turn, and the game started to change. The beer category started to become more interesting in 2019, and the whole beer industry should be building on that in 2020.
Q: What are some brands or brand stories that stand out for you over the last year?
A: I continue to be hugely impressed and encouraged by the work that Miller Lite has done. Going back all the way to the Super Bowl and how the team reacted to the assault on us to everything they’ve done post that has really been gratifying. I think Miller Lite is as strong as it’s been in many, many years.
The work on Coors Light with its Chill program has been outstanding, and its performance in Nielsen has been very encouraging over the fourth quarter. Blue Moon also had a strong year, driven in part by its new campaign launch, which clearly resonated with drinkers.
On the innovation front, the work that the Arnold Palmer Spiked team has done and are doing is impressive. That’s a big brand now, exceeding 1.5 million cases in 2019. And the first national campaign for Peroni has been hugely successful. There’s a lot to be proud of as a team.
Q: Based on sales trends and industry buzz, 2019 was the year of hard seltzer. 2020 will be the year of what?
A: I think seltzers will continue to grow in 2020. From us, there’s so much to like about Vizzy from a differentiated point of view. That brand has strong potential to be a meaningful player in the hard seltzer segment.
Q: There also appears to be underway a better-for-you cultural shift. What else is going on in that space?
A: There’s more demand for drinks that are non-alcoholic, which is why our new division is so important. Younger legal-drinking-age consumers, in particular, are making choices around what they consume, and more of them are choosing non-alcoholic beverages or drinks they perceive to be better for them. And that's played a big role in how we've shaped our innovation pipeline.
Q: Including Vizzy, Molson Coors has a full slate of new products coming to market in 2020.
A: I’m very excited about all of our innovations. Our distributors are behind Saint Archer Gold and for good reason. It’s the first time we have given them a brand that really, truly will compete directly with Michelob Ultra. The stars are all aligned for that brand to do very well.
Blue Moon Light Sky has been one of the easiest sells to both our network and our retail system. That brand is exciting.
And Movo, our first entry into canned wine, is going national this year, and we think it has great potential.
Q: Above-premium brands are getting a lot of love this year, but you’ve told me you’re also excited about some developments in our economy portfolio.
A: I’ve been super impressed by our economy team. They’ve taken a very limited budget and have gotten super creative with it. The Steel Reserve Alloy Series program late last year was a real winner. And I’m excited about Keylightful, which has great potential to recruit younger legal-age drinkers to the brand.
Q: You sound optimistic. It’s been a rough few years for the beer industry. What gives you hope?
A: What gives me the hope is the quality of the ideas coming out of our organization and the talented people we have to bring them to life. The fact we’re going to be able to put the required funds behind those ideas. The fact that we’re moving quicker. The fact we’re willing to take more risks, and we’re clearly demonstrating that. The issue is not going to be coming up with ideas to put money behind, but how to execute against all ideas we’ve got. We’ve got more than 10 new campaigns, some of which already have launched and more than 10 new innovations coming in 2020. We’re not short of ideas.
Q: When we sit down next year at this time, what do you hope to be able to tell us about 2020?
A: I hope to tell you that Miller Lite and Coors Light have continued their momentum. That we’ve already started to move the needle meaningfully on our above-premium portfolio. That we’ve launched brands in 2020 that we think can be big brands in the future. That the revitalization plan has been put to bed with minimal disruption and that we’ve generated the cost savings that we wanted to generate. And that we recruited more talented people in 2020, building off great new talent we recruited and added to our tremendous team in 2019.
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