Molson Coors UK FD brews up a solid future for the company
David Heede, finance director of Molson Coors UK
By Jaimie Kaffash | CFO UK | Published 11:31, 05 March 12
If there is one vital attribute of the brewing industry, it is sociability, says David Heede, finance director of Molson Coors UK, Britain's biggest brewer.
"We are at our best with a beer in the hand and we are talking at the bar. That is where we get our business done," he says. Indeed, he adds, Molson Coors' mantra could well be: "Having a beer with friends is one of life's simple pleasures".
This sentiment pervades the whole company, which has existed in various guises for more than three centuries. "I have never been asked why I work for a brewery. You might get asked why you work for a pharmaceutical company, but no one will ask why you work for a brewery," Heede says of the sociable industry.
And the finance chief is testament to this observation. He began his finance career at Bass 32 years ago and has remained at the same company for his whole career. "My length of service is not untypical of the business," he says.
Indeed, he outlasted Bass itself – the brewery was taken over by Interbrew in 1999, which was itself acquired by Coors in 2002, and became brewer and distributor Molson Coors in 2005; the group is listed in the US and Canada.
Heede joined Bass in 1979 as a trainee accountant and has had roles as diverse as regional sales managing director, procurement director and head of strategy and change. His current role also encompasses IT and he is responsible for a couple of joint ventures.
His varied commercial experience gave the CFO a solid overview of the wider business, which is essential for a finance chief in the industry, he says. "We are a business leader first and foremost and a functional expert second. I could quite easily be called over to the brewery to talk to a couple of hundred contractors about health and safety on the site. If you come through a strict financial discipline that becomes very difficult."
That said, his financial grounding has certainly ensured his path to the top finance role. "I would say that whatever role I have done, the financial discipline has stood me in good stead. I don't think you could do this role without the financial background, but having an idea of the numbers helps in procurement and sales."
The ethos of 'sociability' has another side to it, presenting the industry with one of its biggest challenges – that of corporate social responsibility. Increased regulation has placed greater responsibility on companies like Molson Coors to ensure its products – which include Carling, the UK's best?selling lager, and Burton staple Worthington's – are drunk responsibly.
Indeed, the brewing industry is one of the UK's more heavily regulated trades. "There has been more than one new regulation in the industry every year since World War I," he says.
A changing industry
Regulation slightly pales into comparison with the duties paid on alcohol – alcohol duty costs 42p for every pint of Carling sold, on top of VAT. Heede estimates that the company pays duties of £550 million a year.
But regulation and duties are not new. What is new is the decline in the popularity of beer – the industry's volume is 20 percent less than it was six years ago, Heede says. Critically, input costs – such as barley, oil and diesel – have all grown steeply, adding to the industry's woes.
"In the past six years, the competition at the front end has never been as intense."
But the figures for the UK business have been generally encouraging. Molson Coors' market share has remained at 20 percent, but to make up for the decline in volume the company has put a 'value-over-volume' strategy in place, involving a focus on increasing gross margins on its flagship brands.
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