When interim MillerCoors CEO Gavin Hattersley announced that Innovation VP David Kroll would replace Andy England as the brewer's new chief marketing officer, he did not mince words.
"We're not satisfied with our volume performance, so we need to take action to change that dynamic," Mr. Hattersley said in a statement a couple weeks ago.
Mr. England's exit had long been expected by people close to the MillerCoors, which has been struggling to concurrently grow its top two brands, Coors Light and Miller Lite. But Mr. Hattersley's sudden move -- which came on his second day on the job -- surprised some observers. He also removed sales chief Ed McBrien, replacing him with MillerCoors veteran Kevin Doyle.
"This is one of the the most unceremonious departures in the history of the beer business," said one MillerCoors distributor, noting that Mr. Hattersley's announcement barely mentioned Mr. England and Mr. McBrien, failing to even thank them for their years of service.
The elephant in the room
The abrupt announcement is indicative of the pressure MillerCoors is under to grow its largest brands, which have lost volume to craft brews, and wine and spirits. A big share of the burden now belongs to Mr. Kroll -- and he seems well aware of it.
In his first interview since taking the job, he addressed the elephant in the room: Is it possible to grow Miller Lite and Coors Light at the same time? "The answer on that is absolutely yes," he said. But he quickly added a caveat that it would take place "over time." The "near-term priority is very much around stabilizing and reversing the trends on those businesses," he added.
The good news for MillerCoors is that it has recently outperformed its top competitor, Anheuser-Busch InBev. While both companies are struggling to sell more beer in the U.S., MillerCoors volumes fell 2.4% in the four weeks ending July 4, compared with a 3.1% drop for A-B InBev, according to a recent report by Beer Business Daily, citing Nielsen figures. Year-to-date, Miller Lite is up slightly by 0.7%, but Coors Light is down by 0.6%, according to the publication. Bud Light fell 4.4% in the four-week period and is down 1.5% year-to-date.
While Mr. Kroll, 46, is still settling into his new role, he offered some clues about his priorities, routinely suggesting that the brewer's marketing needs more consistency. "I think we have been just a bit too scattered across our messaging over the past several years," he said. "In any given year we have shifted campaigns three, four, five times. And I think over time that really starts eroding the meaning of our brands. And you will see me very focused on bringing that consistency back."
Mr. England, in an email, declined to comment. But Mr. England -- who was named CMO in 2008 when MillerCoors was formed -- cited some of his accomplishments. "I'm proud to have lead the team that took Coors Light from No. 4 to No. 2 in the U.S. beer business," he said. He also touted "nine consecutive years of growth on Coors Banquet," and the growth of Blue Moon, which he said evolved "from a regional business to the largest craft beer in the country."
'No one bats a thousand'
Mr. Kroll's exposure to the beer business began in college, when he said he bartended his way through Cornell University, where he also obtained an MBA. Mr. Kroll, who was born in Boston and raised in New Jersey, has held marketing roles at companies including Procter & Gamble, Wm. Wrigley Jr., Alberto Culver and vacuum cleaner company Dyson, where he said learned the "power of design."
He took the MillerCoors innovations job in 2012. In that role he oversaw the launch of Miller Fortune in early 2014. The higher-alcohol brand extension was designed to target millennial males and steal share from fast-growing liquor brands. But it has remained a niche brand with diminishing marketing support. Mr. Kroll also oversaw the launch of Redd's Apple Ale, a flavored malt beverage that has been an unquestioned hit.
"In the innovation game, no one bats a thousand," he said. Fortune followed A-B InBev's launch of the similarly positioned Bud Light Platinum, which has also struggled. The category "ending up collapsing a bit," Mr. Kroll said. But flavored beer is "exploding," he said, and "Redd's is helping to lead that growth."
The brewer's next innovation play could be to jump on the emerging hard root beer trend. Beer Business Daily reported earlier this week that MillerCoors is considering rolling out a lower-alcohol (4.2% ABV) line called Henry's Hard Soda's next year that would include root beer and ginger ale flavors made with cane sugar. Mr. Kroll declined to comment specifically on that report, but he came close to confirming it: "I think the hard soda space is definitely compelling and fast-moving. I also believe that with our brewing capabilities we have the ability to enter with a superior preferred entry."
Back to the Rockies
But his tenure as CMO will ultimately be judged on the direction of Miller Lite and Coors Light. Coors Light's struggles began in 2013 when its sales began declining after growing from 2005 to 2012. A high point came in 2011 when the brand surpassed Budweiser to become the nation's second-largest brew, according to Beer Marketer's Insights.
Mr. Kroll said in recent years Coors Light has shifted its tone and campaigns too many times. "My drive with that team is to get back to a much more consistent meaningful message around Rocky Mountain cold refreshment," he said. A low point came earlier this year when the brewer scrapped a planned campaign because ads did not go over well with distributors. People familiar with the abandoned ads described the campaign as being set in the mountains and involving a man who dispensed Rocky Mountain wisdom about Coors Light.
The brand this summer has run ads called "Born in the Rockies" that use breathtaking mountain imagery that emphasize the brand's Rocky Mountain roots. (It is now brewed in multiple states across the U.S.)
Mr. Kroll called the ads a "step in the right direction" that "re-anchors us on the heritage and place of the brand." But he said the effort was not a "panacea for where we go in the future," adding "I would expect a big move forward in 2016."
It remains to be seen whether the brand's agency, WPP's Cavalry, will come along for the ride.
Very purposeful
Mr. Kroll said he does not have immediate plans to make agency changes, and is instead focusing on "our internal efficiencies first," suggesting there are ways to spend marketing money smarter. One of his first tasks will be to replace Coors brand family Senior Director Malini Patel, who recently resigned to take a job as VP-World Whiskey and Americas Innovation at Beam Suntory.
MillerCoors might also need to hire an executive to oversee media. Mr. Kroll added media to his responsibilities in February after the departure of Senior Director of Marketing Stevie Benjamin, who left for a job at Target.
Any agency moves will be "very purposeful," Mr. Kroll said. "I am a big believer in building long-standing partnerships with agencies. You are seeing a lot of annual shifts right now by some of our key competitors, which I fundamentally believe is unhealthy to building meaningful brands."
The nation's largest brand, Bud Light, recently completed its fourth agency change in roughly four years, tapping Wieden & Kennedy, to replace BBDO. For its part, MillerCoors has cycled Miller Lite through various shops in recent years. The brew moved to TBWA Worldwide's Los Angeles office late last year. Lite began reversing a long-slump in 2013 after MillerCoors brought back its original white-label package design. But Lite finished 2014 in the red, with shipments down 1.6%, according to Beer Marketer's Insights.
Under TBWA, Lite has been running a campaign called "bodega" that includes ads showing people interacting with a storekeeper named Fred.
Mr. Kroll said that "70% to 80% of what we've got going on right now with Miller Lite is working. You should not be expecting holistic changes to the plan we are executing now."
Like many people inside MillerCoors, Mr. Kroll is rooting for Mr. Hattersley to be named permanent CEO. "Gavin is not a guy that is coming in to keep that seat warm," he said, adding that "I am incredibly inspired by the growth agenda he is putting out for the company."
The board of MillerCoors -- which is a joint venture between SABMiller and Molson Coors -- picked Mr. Hattersley after failing to identify a permanent replacement for Tom Long, who retired as CEO on June 30. Mr. Hattersley is a former chief financial officer for MillerCoors who had most recently been serving as chief financial officer for Molson Coors.
