Cordell B. Sweeney Senior vice president and chief financial officer, Pabst Brewing Company
Last spring, Time magazine dubbed Pabst Blue Ribbon the “nectar of the hipster gods.” Maintaining such momentum amidst hundreds of microbrews and regional brands is a tall order. As the largest American-owned brewery, Pabst Brewing Company needs all parts of the business—particularly the finance team—delivering business value, not just for the flagship brand, but for its entire portfolio of more than 30 national and regional beers. Yet when Cordell Sweeney joined Pabst as chief financial officer in October of 2012, the 162-year-old company was still practicing the “proverbial thousand-spreadsheet march.” Sweeney has since led a transformation of the finance function, boosting its efficiency in executing the basic blocking and tackling of finance, and using advanced analytics to focus the finance team on higher value activities that help drive sales, profit margins, inventory velocity, cash generation and market share. Here, Sweeney talks about how Pabst is changing the conversation, using data-driven insights to inform better business decisions.
What did you encounter when you joined a company with such a rich tradition and history?
What I found here when I arrived was we never had one version of the truth, whether that was dealing with a distributor, a customer, dealing with people internally. Having multiple versions of the truth creates many problems. One, it’s a waste of time because what happens is people lose faith that the numbers that are being presented are credible, and people end up debating those numbers. If you can get to the spot where you have one set of information that people can rely on, the blame game goes away. And then you can start to focus on the true operational drivers and what’s happening to deliver value to the company.
So how are you now arriving at that one version of the truth?
When I first arrived at Pabst, we were in the proverbial thousand-spreadsheet march. We were in a position where our information technology infrastructure had not been invested in for a number of years, and we are now in the process of going through a complete transformation. And within that transformation, the first important part from my perspective was our performance management suite.
We believe in having data-driven conversations with the leadership teams in the field. And what I look to is the ability to use technology not only to set targets, but also to monitor targets and our performance against our goals and objectives. Ultimately the organization must have quick access to information to help better understand what’s driving the business.
And what’s the CFO’s role in delivering that information?
I have responsibility for the finance organization, the operations organization and our information technology organization. And the thought behind aggregating those three functions together was to drive collaboration and synergies across the organization.
The CFO is in a seat where he or she has the ability to really put all the pieces together and be a partner to the CEO, president, executive leadership teams and boards of directors. The key things that I focus on from a finance perspective, it clearly starts with sales—sales volumes, in particular. What is our distribution percentage across the country? And, also, what is our rate of sale by retail establishment. All of those are non-financial metrics. But they are the core drivers to generating our gross revenue numbers.
The next thing that I focus on is our profit margins. Profit margins are driven in most businesses not only by product mix, but also by sourcing, plants, freight and other things. Another area of significant concern is inventory velocity. What is the rate that we are taking inventory, producing inventory and making sure that it’s turning; and that we have the right inventory turning out and generating the sales that our customers are expecting.
But it’s also about financial performance. So whether it’s volumes, whether it’s gross margins, whether it’s EBITDA generation capability—ultimately, those drive the value of any business.
How is technology helping you use historical data to see over the horizon?
We are in the process of rolling out an 18-month forecasting cycle that will be based purely on predictive analytics. The single biggest weakness in our finance organization, as well as the rest of the company, is the ability to accurately plan and predict volumes. What I saw in the analytics platform was the answer to my most difficult and complex problem.
We are a business that has a tremendous amount of historical information—down to a distributor by package, by brand—that we are in the process of modeling and using to give me a forward-looking view. What we plan on doing with that predictive case is providing it out to the field—our vice presidents of the east and the west, our general managers who run the divisions—in the form of a contributor application. They can then go in and make real-time adjustments to that predictive case. We will then take results and apply all our financial modeling to that.
How important is making a social connection with consumers in your industry?
In this day and age, having that connection to the consumer is key. It’s also key in our business because technically we go through a distributor and a retailer to get to the end customer. So to have touch points and protect the brand image at the consumer level is up to us as an organization. We are stewards of the brands we’re responsible for. Pabst has been recognized consistently in the past three years for being a leading performer in the social media space. Following social media and the indicators that go with it help drive our marketing programs. And our current brand Web sites are geared around social media-type activities and programs.
And what’s out on the horizon for Pabst?
As I look at our roadmap ahead, everything we’re doing from a people, process and technology perspective after getting to a rolling, 18-month forecasting cycle will be using our analytics platform and its capability and our ability to continue to modify, morph and add better insights and better data to arrive at a better, predictive answer. And, ultimately, within the Pabst business, it’s enabling mobility for our sales force.