MillerCoors will slash up to 500 jobs and change its name as millennials ditch beer

Hollis Johnson/Business Insider

MillerCoors will soon no longer exist in its current form.

• Molson Coors announced a massive restructuring on Wednesday, which will kill the MillerCoors brand and combine the company's US business with its Latin American and Canadian businesses.
• The company said it expects to cut roughly 400 to 500 salaried positions in the restructuring.
• Molson Coors CEO Gavin Hattersley said the company's business was "lagging," as "core brands have seen years of volume losses, and we haven't had the resources needed to fully invest behind our innovations."
• In 2018, sales of Coors Light declined by 3.9% and Miller Lite's dropped by 1.3% as millennials ditch beer.
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MillerCoors will soon no longer exist in its current form.

On Wednesday, Molson Coors CEO Gavin Hattersley announced a massive restructuring plan that will effectively kill the MillerCoors brand.

In January, the company will be renamed Molson Coors Beverage Co., from Molson Coors Brewing Co., as the brewing giant attempts to expand beyond beer. The company said it expects to cut roughly 400 to 500 salaried positions, primarily in North America and from Molson Coors International.

The US business - called MillerCoors - will be combined with its Latin American and Canadian businesses, according to the company's Behind the Beer blog. The company will close its Denver office and make Chicago the headquarters of its North American commercial business, with support positions consolidating in Milwaukee, Wisconsin.

With the exception of its Latin American team, the rest of Molson Coors International will be folded into Molson Coors Europe.

According to Molson Coors, the changes will allow the company to reinvest $150 million annually, focused on above-premium beers, while expanding its options beyond beer and building out its digital capabilities.

The beer giant needs to make a comeback

Hollis Johnson/Business Insider

Coors Light sales are slumping.

Hattersley became CEO in late September.

"As the world around us rapidly changes and the nature of competition intensifies, our business performance is lagging. We're over-indexed in declining segments, our core brands have seen years of volume losses, and we haven't had the resources needed to fully invest behind our innovations," Hattersley said in the note to employees quoted in Behind the Beer.

In 2018, dollar sales of Coors Light declined by 3.9% while Miller Lite's dropped by 1.3%, according to market research firm IRI. Beer sales in general are slumping in the US, with volume by sales dropping by 1% from 2017 to 2018 according to Euromonitor data.

Younger drinkers in particular are moving away from beer.

In August, Bank of America Merrill Lynch released a survey that found 31% of millennials said they are drinking less alcohol than before, up from 21% in 2018. Among millennials who are drinking less, 27% said they were drinking less beer - more than the 26% who said they were drinking less spirits and 12% who said they were drinking less wine.

In July, MillerCoors' chief marketing officer, Michelle St. Jacques, told Business Insider that the company was aiming to find fresh ways to highlight the benefits of Miller Lite and Coors Light while also pushing new beverages. The company has also been developing new brands, such as sparkling cocktail brand Cape Line and Hard Cold Brew Coffee.

"We cannot and will not wait," Hattersley said at the end of his note to employees, according to Beyond the Beer. "We will move faster and free up resources. We will invest in our brands and in our capabilities. We will regain the glory of our past, and we will create a brighter future for the Molson Coors Beverage Company."