Molson Coors Brewing Co. will cut hundreds of jobs in a restructuring effort that will see the brewer change its name as it focuses on growing its portfolio beyond beer.
“Our company makes some of the world’s greatest beers and our iconic brands have withstood the test of time,” said CEO Gavin Hattersley.
“But as the world around us rapidly changes and the nature of competition intensifies, our business performance is lagging,” said Hattersley during a conference call with analysts after the company released its third-quarter results.
Hattersley replaced Mark Hunter, who retired in August, after five years in the top post and 17 years with the company. Hunter left as Molson grappled with declining beer demand in North America as consumers shift toward craft brews, wine and spirits.
READ MORE: Molson Coors CEO to step down as profits continue to sag in flat beer market
The Montreal-based brewer announced Wednesday that it expects to cut 400 to 500 jobs, close its Denver office and designate Chicago as its North American operational headquarters.
The changes will come as part of a revitalization plan that will focus on several key areas, including investing in the company’s iconic brands and aggressively growing its premium business, he said.
It will also expand in businesses beyond beer, he said, citing its recent additions of premium ciders and hard seltzer, as well as its work to launch CBD-infused, non-alcoholic drinks.
“You will see us push into these white spaces faster than we ever have in the past,” Hattersley said.
This focus on extending itself beyond beer has led the company to decide to change its name to Molson Coors Beverage Company, starting at the beginning of next year, he said.
“The name speaks volumes about who we are and what is possible for our business.”
Some analysts on the call questioned what was new about Molson’s plan, which has been focusing on the areas outlined in the revitalization plan for some time now.
Hattersley highlighted the company’s ability to take more risks and move faster than it has in the past under the new plan. Molson also won’t be forced into making the tradeoff decisions it’s had to in the past about where it will put its investment dollars, he said.
“This is a lot of change, but we will execute it efficiently because we cannot wait and risk allowing the competition to continue passing us by, to outspend us, to out innovate us, and to outmanoeuvre us.”
Molson expects approximately $120 million to $180 million in charges related to the changes.
The plan was announced as the brewer, which keeps its books in U.S. dollars, released its most recent quarterly results. It lost US$402.9 million or $1.86 per diluted share for the quarter ended Sept. 30 as it was hit by a goodwill impairment charge related to its Canadian operations. The result compared with a profit of $338.3 million or $1.56 per diluted share a year ago.
Net sales totalled $2.84 billion, down from $2.93 billion a year earlier.
Molson’s underlying profit for the quarter totalled $321.2 million or $1.48 per share for the quarter, down from an underlying profit of $398.5 million or $1.84 per share a year ago.
READ MORE: Here’s how much it costs to make a can of craft beer