More bad news from the land of macro beer—in response to a weak 2018, which included the rollout and discontinuation of its Two Hats brand in only six months, MillerCoors is taking some serious action. The beer giant today announced that it is eliminating 350 salaried positions across the company, a major move that speaks to just how fraught things have become in the beer industry as a whole.
As the company’s official blog notes: “The reorganization follows several years of volume declines amid a challenging industry, including a tough first half of 2018. It comes as a recognition that the company’s organization and cost base are now out of line with the scale of its business and increasing costs.”
“We are moving quickly and decisively to get our business back on track,” said MillerCoors CEO Gavin Hattersley in a message to distributors. “To accomplish this, we know we need the financial flexibility to invest in our brands and solutions at the right level, quickly capitalize on new opportunities, and maintain a robust marketplace presence. Our current fixed cost base limits our ability to do all this. We’re committed to handling this restructuring with speed, dignity and respect for all involved and without marketplace disruption.”
As is pretty much always the story here, it was domestic premium lagers that are leading the freefall as they continue to decrease in volume, losing market share to wine, spirits and craft beer—although craft beer industry growth has also continued to slow. A weak Fourth of July weekend was cause for more alarm for MillerCoors, and for brewers in general. Overall beer consumption in the U.S. has been steadily declining, and was down 2.3 percent from July of 2017, according to the Beer Institute.
It’s no wonder, then, that so many beer companies are exploring alternate venues for revenue, whether it’s MillerCoors trying to jump on the low-calorie “flavored alcohol beverage” train with its new Cape Line products, or other brewing companies openly courting the THC/cannabis market, ala the huge investment by Constellation Brands into Canadian cannabis.
Yes, it’s a scary world out there for brewers these days, on all levels of the industry. What might be able to turn around the beer industry’s fortunes, we can’t say—but it’s almost certainly not going to be American adjunct lagers.