Hattersley: MillerCoors moving with speed to get business back on track

MillerCoors is ending 2018 by taking action to get its business on track in 2019.

In just the past few weeks, MillerCoors has boosted investment in TV ads for Coors Light, launched new holiday-themed spots for Miller Lite, changed up its agency roster, and, along the way, made some leadership changes.

This follows earlier moves that included launching a search for a new CMO, bringing in new agencies for Blue Moon and Leinenkugel’s, as well as a corporate restructuring.

It’s reasonable to expect more change is coming.

“We weren’t kidding when we said we need to move faster to get our business back on track,” MillerCoors CEO Gavin Hattersley said in an interview. “We’ve thought long and hard about what that requires, and we need to be decisive to bring it about.”

We reached out to Gavin to discuss some of the actions MillerCoors made and will make to get on the path to growth in 2019.

Well, there’s not a shortage of topics to discuss, so let’s start with the biggest one. What’s the latest on Coors Light?

Earlier in the fall we broke some digital spots that brought cold activation back to life. Many 21-to 34-year-old drinkers, surprisingly enough, are not aware that the mountains turn blue when the beer is cold. That’s something that actually matters to drinkers, so we wanted to tell them. The response was so positive that we moved quickly to identify funding to get the ads on TV this month and build even more awareness.

And the new campaign is still coming in January?

Our team has been working hard with 72andSunny to bring the new campaign to life, and it’s coming along faster than we originally expected. You can expect to see new commercials on air next week.

Sticking with marketing, MillerCoors made some changes to its agency roster, specifically with Coors Banquet and Redd’s. Can you tell us more about that?

Simply put, we were looking for new thinking for two of our most important brands.

In the case of Coors Banquet, we are going in a more digital direction to better connect with our consumers. As a result, we chose to go with a more digital-forward agency in Mekanism.

As for Redd’s, its performance has been — frankly — disappointing in recent years. We need to turn that around. We believe Redd’s has equity, and we need to do a better job of bringing that to life. Energy BBDO, which has been bringing forward some sharp thinking for Cape Line, had some ideas about how we could get the brand going again. So we’re giving them a shot.

I wouldn’t take this as a condemnation of Mekanism, as we obviously think highly enough of them that we hired them to work on Coors Banquet, a brand that’s at the very heart of our company.

Bottom line, we need to make sure we are doing what’s best for our brands. And we will.

Beyond agency changes there have been a few leadership changes at MillerCoors. Can you comment on that?

We’ve had some changes in our sales team, primarily, due to a variety of reasons. Dan Werth, who heads our chain team, left to pursue an excellent opportunity with a former mentor.

Nigel Tordoff, Molson Coors global vice president of customer excellence, has come over to succeed Dan. Nigel has deep experience with chain stores in the U.K., having called on customers such as Tesco. In particular I am looking forward to seeing how he can help us capitalize on the growth of the ecommerce channel in beer, which is huge in the U.K. and still relatively underdeveloped — but quickly growing — here.

Meanwhile, Dan Hennessy, who has done an excellent job leading the Southeast Region, and before that in the customer marketing function and on Coors Light, is taking on an important commercial and strategy leadership role for Molson Coors International. Fortunately his successor is one of our most experienced sales leaders, Matt Dzarnowski.

Earlier, we named Brad Schwartz our chief strategy officer. Brad has been involved in virtually every important decision we’ve made since we launched MillerCoors, and he is already making an impact in his new role.

And we just named Adam Collins, who previously worked as the communications director for Chicago Mayor Rahm Emanuel, as our vice president of communications and community affairs, succeeding Julie Kubasa, who has elected to retire after more than 37 years with us.

Our leadership team was strong before, and we’ll continue to ensure we have the right leaders in place to move our business forward

And what’s the status on the CMO search?

There has been great interest in the role, and we have been talking to some world-class marketers. We know it is critical we get the right person, and we are getting closer to finalizing it. But as I said last summer, we will take the time necessary to make sure we appoint the right leader, and that’s what we are doing. Meantime we have a host of excellent marketers working very hard to elevate our brands’ messages, and you have and will be seeing the results of that.

As you look back on 2018, what are your some of your takeaways?

It was a hard year. There’s no question about that. But I can say that as a team we made an effort to understand where we made missteps and course-correct. The conversion to a new ordering system in Golden did not go well. So we dug in to understand the root causes, we brought in new leadership, and we acted decisively to change our approach. We have a long way to go before we can declare victory, but I think we are in a better position than we were.

We adjusted on Coors Light as well. We had high hopes for the reboot of Climb On, but we saw it wasn’t working, we heard from distributors it wasn’t working, and we moved quickly to change rather than stubbornly stick to the course we were on.

That said, we did a lot of things right. Working with our distributor network, we established Sol as a legitimate contender in Mexican imports. Arnold Palmer Spiked doubled expectations for Year One. And Miller Lite continues to take share in American light lagers and is holding share overall — not a small achievement for a light lager, and a testament to how having the right message and support can make a big difference. You can expect us to be even bolder with Miller Lite in 2019.

This past summer MillerCoors announced a significant increase in the freight and fuel surcharge for 2019. It turns out it will be lower than originally forecast. What drove that?

Given all the headlines around the national trucker shortage, it was pretty clear to any observer that our freight and fuel surcharge was going to be significantly higher in 2019 than in the prior year. We wanted to give the network as early notice as possible so they could plan for it. It was a big number and, not surprisingly, a lot of people — including ourselves — were not happy about it.

Freight rates are still going up, but when we took another look later in the year we saw the rate of increase moderated. So we did what we promised we would do if market forecasts changed and told the network that the surcharge was coming in about 20 percent below our original forecast. Still a big increase over 2018, but lower than expected.

Our distributors are independent businesspeople, and we know that some have been talking about cutting back on marketing investment and the like in 2019. We think that’s short-sighted, and we continue to have conversations. Hopefully the reduced rate will encourage them to put more money into the market, which many of our distributors are actually doing. We will be investing right alongside those that do.

What gets you excited about 2019?

A lot, actually. The new campaign for Coors Light should start getting that brand moving in the right direction. We have momentum on Miller Lite, and we’ll accelerate that by going bolder. And we are really upping our game in above premium, investing more in that segment than we ever have. That’ll show up in significantly increased media support for Blue Moon; the first-ever national media campaign for Peroni; exciting new news for our fast-growing Henry’s Hard Sparkling Water; a big push behind Leinie’s; new packs and investment for Sol and Arnold Palmer Spiked; a test for our craft light lager Saint Archer Gold; the launch of Cape Line Sparkling Cocktails, and much more.

I think our people are feeling that same excitement. I’ve been visiting a lot of our locations in recent weeks, and there is a real sense of energy. We’ve made a lot of changes, some of them difficult, but I think people see that we’re making the calls we need to make to get our business on the right track. And I think that builds confidence as we head into 2019.

Any parting thoughts?

I would just like to thank our distributors and our team for hanging in during what was a challenging year. We grappled with supply-chain issues, and we worked through our share of industry challenges — I haven’t even talked about aluminum price increases, have I? Through all that, I appreciate everything our distributors and our team did to sell our brands. So I’d like to say cheers, have a happy holiday, and I’m looking forward to working together to get our business back on track in the new year.