Peter Swinburn, boss of the world’s fifth biggest brewer, Molson Coors, says companies should not get carried away by their own good deeds
Type Molson Coors into Google, and second on the list of search results is the drinks company’s corporate responsibility website, with a speech by new chief executive Peter Swinburn.
The recently appointed Swinburn, one of the few Welshmen to run one of the world’s big companies – Sony’s Howard Stringer is another – is evidently attempting to stamp his mark on the $5bn brewer.
Created from a merger of the US beer brand Coors and Canadian brewing legend Molson, the company, the world’s fifth biggest brewer, operates in about 30 countries.
Its revenues remain dominated by its flagship North American brands, Coors and Molson. But executives say the firm has plans for further global expansion in the rapidly consolidating worldwide alcohol market. Giant competitors such as InBev, SABMiller and Diageo now bestride the industry. Many observers saw the Molson Coors merger, announced nearly four years ago, as essential for the survival of the two companies. Staying separate would have meant being eaten up by bigger rivals.
Collaboration in the industry continues. Perhaps anticipating this year’s acquisition of Anheuser-Busch by InBev, a year ago Molson Coors set up a joint venture with SABMiller, now known as MillerCoors, to market their drinks collectively. That venture now has about 15,000 employees.
Beyond the cut-and-thrust of modern global beer deals, responsible business is today high on the agenda of most big brewing companies. Three issues appear to dominate: community impact, including how raw materials are sourced; secure water supplies and efficiency; and the effects on consumer health of alcohol products.
One of Swinburn’s first moves after taking charge of Molson Coors, was to sign up to the UN’s CEO Water Mandate, which he did in September. The brewer has spent three years measuring its water footprint, and reducing it is a core area of strategy. “It fits logically with what we are trying to do strategically in terms of watershed management,” Swinburn says.
Given that watershed management is an issue always greater than any individual company’s operations, does Swinburn see a role for initiatives such as the UN’s to influence the public policy debate? Swinburn sidesteps the question, saying generally: “We believe we can have a positive effect … that’s why we are joining it.”
Molson Coors is familiar with modern water challenges. Its Coors beer claims its distinctive flavour comes from its Colorado river water source. But heavy use of the Colorado, which runs through the Grand Canyon, means it no longer consistently reaches the sea.
DNA, not a department
Swinburn says he has little time for building up a large corporate responsibility department in his firm. He says: “We want it to be in the business, in the psyche of the business. The problem of building up a department is it becomes something that ‘they do over there’ and people don’t take personal responsibility for it.”
Swinburn believes that a better approach is to “set out very clear objectives and metrics of what we are going to achieve” within the governance structures of the company, and declare those goals publicly, including on a prominent website “so all our stakeholders can see how we are progressing”.
The relevant company management report on progress to its executive committee twice a year and to the main board once a year. “That brings everything to life,” Swinburn says. “Setting the tone at the top and making sure you put out the measurements makes sure that the whole organisation takes it seriously.”
Swinburn wants to encourage a company culture where “we should challenge the expected”. As a company, he says, “you can give yourself a lot of comfort” by taking steps to address social and environmental concerns, but he warns against complacency.
The key question for senior managers, says Swinburn, is to ask “are we being compliant, or are we being aspirational?” Aiming high motivates both the organisation and the individual, he says. Transparency, too, can stop companies from being too comfortable about their social and environmental performance, he says. “If you’ve failed, say why you’ve failed,” he explains.
Does Swinburn see the current market turmoil affecting responsible business engagement by large companies? Evidently not. “If you are running a business of this size, your mandate is to run it for long-term profitable growth. There are always events that go on, so whether it’s brand-building, the balance sheet, great people development – or whether it’s actually making sure that your CSR programmes are sufficiently funded – all of those things you do in the medium to long term. That is what builds shareholder value, stakeholder value and your margins over the long term.”
Bosses’ conservation pact
Peter Swinburn in September became the 32nd chief executive to sign the CEO Water Mandate, launched by bosses in water intensive industries in 2007, in association with the UN Global Compact and the government of Sweden.
The mandate provides a framework for companies to address water sustainability in their operations and supply chain.
Beer is around 90% water, making pure and clean water a necessity for the brewing process.
Molson Coors aims to reduce its overall water usage by 4% in 2008. In Canada, Molson has reduced its water use by 12.4% over the last four years. In the UK it cut water use by 14% in 2007.
Molson Coors sold a total of 42.1m (US) barrels – about 4.9bn litres – in 2006, making it the fifth largest brewer in the world. Three-quarters of sales were in north America. Its biggest brands, by volume, are Coors Light, Carling and Keystone Light.