Managing Meetings At Coors Brewing Co.: Co. Distills New Strategy

The third-largest U.S. brewing company during the past year has completed stage one of an initiative to better track and manage its corporate meeting expenditures and already has achieved an 85 percent compliance rate and an estimated 10 percent savings this year in per-attendee costs, according to the company's strategic sourcing manager. Golden, Colo.-based Coors Brewing Co.'s meetings department has chosen to roll out changes based on meeting type, rather than by department or all at once, with incentives the first events targeted for more strategic negotiations.

"Our first step is identifying the type of meeting and really looking at cost savings on a per-attendee basis," said Pam Esker, strategic sourcing manager for Coors and a member of the groups and meetings committee of the National Business Travel Association, "because destinations change, components change, etc. The only thing we can do is to see if we were really able to impact that at a lower cost per person and still meet the same objectives."

Esker said the meetings management initiative is a progression of a new procurement policy issued in 2004 in response to Sarbanes-Oxley regulations. Coors in 2005 joined forces with Montreal-based Molson Brewing Co. and has 15 brands of beer, including Coors Light and Killian's Irish Red.

Though SOX drove changes to the program, the company's meeting policy was also in need of updating, she said.

"We had a meetings policy, but it was very loose," Esker said.

Under the new policy, events that cost at least $10,000, not including airfare, must be sourced through a central meetings, events and productions department at Coors, Esker said. Penalty for non-compliance may be non-reimbursement. The department handles about 250 meetings annually, usually with 400 to 600 attendees.

The company began to look at more strategic meetings management as an effort to discover opportunities for synergies between Molson and Coors. Like many companies, Coors "didn't have a clue" what it was truly spending on meetings and events, she said. An estimate based on overall travel and entertainment spend put meetings expenditures at between $14 million and $40 million. After a year of data collection, Esker said the true spend is about in the middle of that range, not including airfare.

"We figure that we have about 85 percent of the data collected now," she said. "There are still some out there that are below $10,000 or renegades who don't follow policy."

The meetings department, which includes four full-time Coors employees and 10 meetings management contract workers, handles mostly promotional events and incentives.

"We've done a tremendous amount of work on incentives," Esker said. "We just sent our request for proposals out for incentives because for the first time we could identify what incentives we did."

The meetings department has a "seat at the table" on all employee incentive programs, she said, and ensures that the structure and metrics of reward programs meet company objectives.

"We don't do anything in a vacuum and we really involve our stakeholders in the decision making process," according to Esker. "Our company culture is very much that we build consensus, so you bring a lot of cross-functional roles to making the best decision moving forward."

The department also conducted extensive surveys to determine the best types of incentives for employees and the data collected has been "phenomenal," she said, and was used in the RFP sent to suppliers.

The incentive programs are the first type of meetings targeted by the department for greater strategic sourcing, Esker said.

"In our meetings spend, we determined that about $6 million was relevant to an incentive fulfillment," she said. "We pick it off one at a time. We identify the types of meetings, then develop a cross-functional team to figure out how to handle it."

Next on the list for strategic sourcing are executive board meetings and senior staff meetings, she said. The department has targeted high-level events to show senior management how their own meetings can be better leveraged.

"We're going to try and make sure we've got those planned for at least two years out," she said. "We'll see what we can do to best manage those types of events. You start working from the top down and if they like what we're doing, we're going to get support for all the other types of meetings."

For smaller events, the department has created an internal Web site where employees can choose from a menu of pre-approved suppliers. Any contracts that include terms and conditions must be signed by the strategic sourcing department, she said. To avoid being inundated with an avalanche of small meeting contracts, the department worked out pre-approved agreements with suppliers. The company's preferred hotel vendor, Marriott International, developed the tool.

"We were already a big user of their properties, so why not have a blanket agreement in place and make it easy for people to do business with them?" she said. "If I can just get them to figure out how they can get our meetings rates into the GDS or into an online booking tool—that's my goal. That would be the Cadillac of all meetings management."

Esker isn't holding her breath for getting meeting rates loaded into global distribution systems. She said the current battle over airline distribution is only the start of what's to come, and soon car rental and hoteliers will want to charge a fee to load rates into the GDS. "It all comes back to us, the customer," she said.

Group airfares are sourced through a dedicated contact at Coors' travel management company.

"Their focus is on being knowledgeable on what the airlines are offering in group rates, as well as managing any arrival and departure list and the reservation process," Esker said. "That allows our meeting planners to focus on the rest of the components of the meeting."

For the time being, the department is focused on domestic meetings.

"We thought we would use the U.S. as a model and begin getting the tools in place here, start leveraging the spend, and use this model to see exactly what impact and percentage of savings that we could achieve with this, and then start looking at the commonalties between us and the U.K. as well as Canada," she said.

Esker has worked with Coors for about 10 years, first as an agency-provided travel sourcing expert. She was hired by the brewing company at the start of 2004.

When the meetings management initiative was launched in 2005, the company originally adopted the Plan2Attend technology product from WorldTravel Meetings & Incentives—WTMI has become BCD Meetings & Incentives and discontinued the P2A product in favor of Philadelphia-based StarCite tools.

The technology was adopted primarily to track meetings spend and manage data, Esker said.

"We did use it for some registration, but I don't think we used it as effectively as we could have," she said. "It was more about getting people to get the data in there."