Pressure from rising freight and aluminum prices prompted Molson Coors Brewing Co. to "take another look" at its U.S. business and cut about 350 jobs, the company's chief executive said Sept. 5.
Speaking at the Barclays Global Consumer Staples Conference, Molson Coors President and CEO Mark Hunter framed the reductions announced Sept. 4 as part of an ongoing effort to cut costs but said the company "moved apace" because of "incremental cost inflation," particularly in freight and aluminum.
The maker of Coors and Miller Lite was one of several beverage companies expecting higher prices from beverage can manufacturers because of 10% tariffs on aluminum imports imposed by the Trump administration earlier this year. Companies who ship products in the U.S. are also grappling higher freight costs because of a lingering trucker shortage.
Hunter did not detail specific cost increases for Molson Coors, but the brewer on Aug. 1 reported $1.19 billion in the cost of goods sold for its U.S. operations during the second quarter of 2018, up from $1.18 billion in the same quarter of 2017. On a per-hectoliter basis, costs increased 5.5% during the second quarter, driven by higher freight fuel, aluminum inflation and volume deleverage, the company said.
"It felt appropriate to really take another look at the shape of our organization," Hunter said during the Barclays conference presentation.
Hunter did not specify which positions Molson Coors will cut in the U.S. but said they are "not taking feet on the street out of our business."
"It's much more about really looking to streamline the business and a lot of the back office and support functions, and this will be completed over the course of the next six weeks," Hunter said.
Still, the CEO said cuts are not unusual for Molson Coors and pointed to similar reductions in the U.S. in 2014, a cost-reduction program in Canada in 2015 and prior cost reductions in Europe.
Molson Coors is targeting $210 million in total cost savings for 2018 and $135 million in 2019, CFO Tracey Joubert said.