In a landmark moment in Colorado beer history, Molson Coors announced on Wednesday that it will move its North American headquarters from Denver to Chicago and cut up to 500 jobs across its international offices.
The beer giant currently employs 2,300 people in Colorado, according to Molson Coors. Around 300 of those employees work in the Denver office, and “a lot of those people will be offered jobs and relocation packages to remain with the company and their teams,” Matt Hargarten, Molson Coors’ senior director of corporate communications, told The Denver Post on Wednesday.
He couldn’t estimate how many of the 400-500 cut positions would be from the company’s Denver offices, but he said the city would take the biggest hit of all those affected. The changes will be made by the end of 2019.
The company will continue to operate its Coors distribution wing in Colorado, however, as well as its Blue Moon Brewing facility in Denver’s River North, smaller brand divisions like AC Golden Brewing and, of course, the 146-year-old, Golden-based Coors Brewery, one of the oldest companies in Colorado.
In fact, Molson Coors will invest “several hundred million dollars to modernize its brewery in Golden,” according to the press release, to allow for “more flexible” capacity and increase supply chain efficiency.
“It’s the second-largest brewery in the world, and it’s old,” Hargarten said of the Coors Brewery. “A lot of (the renovation) is straight-up upgrades and a lot of it is creating more flexible operations.”
Hargarten couldn’t say how non-brewing-operations jobs at the Golden facility would be affected by the company’s headquarters relocation. As for changes to the brewery itself: “It’s a huge investment,” he said. “It’s gonna be felt, let’s put it that way.”
Coors was started in Golden in 1873 by German immigrants Adolph Coors and Jacob Schueler and was originally called Golden Brewery. More than 130 years later, in 2005, Coors merged with Molson to create the fifth-largest brewing company in the world. And in 2016, Molson Coors Brewing Co. completed its takeover of MillerCoors, making it the third-largest brewing company in the world.
“For nearly 150 years we have brewed great beers in Colorado, and we will continue to brew great beers in Colorado for hundreds of years to come,” Molson Coors CEO and president Gavin Hattersley said in Wednesday’s press release. “This investment will modernize the brewery to allow for more flexibility, enable us to move with pace and deliver new products to meet changing consumer preferences.”
Closing the Denver office and moving headquarters to Chicago will save Molson Coors around $150 million, leaving the brand with just two divisions in North America and Europe, according to the release. Previously, Molson Coors operated four divisions in the U.S., Canada, Europe and internationally.
Starting in January, the company will also change its name from Molson Coors Brewing Co. to Molson Coors Beverage Co. This signals a shift to other non-beer products. The brewery will focus on more premium products moving forward, “beyond just light beer, to meet the needs of younger consumers,” Hargarten said.
“Our business is at an inflection point,” Hattersley said in the release. “We can continue down the path we’ve been on for several years now, or we can make significant and difficult changes necessary to get back on the right track.”
Bart Watson, chief economist with the Boulder-based Brewers Association, says that Molson Coors is facing bigger issues of lower overall market share and a network of breweries (after its merger with Miller Brewing) “that wasn’t designed for a single company.”
“This is a challenge that isn’t unique to Molson Coors, and is also being felt by the market leader, Anheuser Busch,” Watson said. “The beer market has been premiumizing, with beer lovers increasingly choosing craft beers and imports, and that has hit the two market leaders hard.”
Molson Coors’ announcement on Wednesday followed news the company’s net sales revenues had decreased by 3.2% in the third quarter of 2019. Molson Coors’ stock price was down 3.31% as of 12:01 p.m. Mountain Time on Wednesday, trading for $52.87 per share.
“(Molson Coors) has been struggling with volume and share losses for more than a decade at this point,” Watson added. “By the end of 2019, volumes will be more than 15 million barrels lower than (the brewery’s) peak in 2008. For context, the total Colorado market is less than 5 million barrels, so the company has lost the equivalent of more than three Colorado markets over the past 11 years.”
But back in Golden on Wednesday, it was business as usual at the Coors Brewery, amid this week’s snowstorm and a freezing four-day cold front. The brewery continues to be the sole maker of Coors Banquet beers, and it will continue do so, according to Hargarten.
“This company has a long tradition here in Colorado, and we don’t want our community partners to think that we’re walking away from that,” he said. “Even after all this is done, we’ll have more employees in Colorado than anywhere else in the world.
“(The Coors Brewery) is actually going to be bolstered,” Hargarten added. “It’s going to be future-proof, so it’s here … for another 150 years.”