Molson Coors to close California brewery, cutting 470 jobs
US brewing giant Molson Coors has announced it will cease production at its Irwindale brewery in California by September 2020.
Molson Coors, which makes Coors Light and Blue Moon, has entered into an agreement with Pabst Brewing co. which gives it an option to purchase the facility.
Chief integrated supply chain officer Brian Erhardt said the closure will “optimise our brewery footprint while streamlining our operations for greater efficiency across the network.”
Molson Coors said it could to cut up to 500 jobs in October last year as part of a major restructuring of its business model in a bid to adapt to a slowdown on mainstream lager consumption in the US.
But the Irwindale brewery’s closure is not factored into the company’s restructuring plans, which means up to 970 jobs could be lost at the end of the year.
The Irwindale brewery, which opened in 1980, employs around 470 people, and produced 4.8 million barrels in 2019, for brands such as Miller Lite, Coors Light, Miller High Life, MGD, Steel Reserve, Miller 64, and several brands for Pabst.
Products currently produced in Irwindale will be transitioned to other breweries, primarily Golden, Colorado; and Fort Worth, Texas, over the next nine months.
“While it was a very difficult decision,” Erhardt said, “we have extra capacity in our system and Irwindale’s production can be absorbed by other breweries in our network.”
The brewer said it would change its name to Molson Coors Beverage Company to “expand beyond beer and into other growth adjacencies” after a third-quarter loss of US$402 million.
It also planned to close its Denver office, and move its headquarters to Chicago. The company has roughly 17,750 employees worldwide, 7,300 of whom are working in the US.
Former chief executive Mark Hunter abruptly resigned in August, coinciding with the brewer’s Q2 results release.
Gavin Hattersley, head of the company’s U.S. business unit, MillerCoors, since 2015, was drafted in as CEO. At the time the rebrand was announced, he said the brewer needs to make “significant and difficult changes” to get back in growth. Since then, the Molson Coors has broadened its portfolio to include non-alcoholic beer, sparkling hop-flavoured waters, and Kombuchas.
The company acquired a “significant” minority stake in California-based L.A. Libations in November, a company which specialises in identifying emerging drinks brands and helping them to expand.
Pete Marino, president of emerging growth for Molson Coors, said in November that developing a strong portfolio outside the traditional beer category is “an important part of our long-term strategy, and this partnership with L.A. Libations enables us to pursue opportunities in this space without needing an extensive non-alcohol infrastructure.”
In July, Molson Coors acquired UK brewery Hopstuff after the London-based brewer fell into administration. The company also launched a sparkling water flavoured with hops, called Wellraiser, into the UK market in August.
But the company has continued to struggle since Hattersly took the reigns. According to results posted in late October, U.S. sales, which accounted for 67% of its US$2.8 billion in revenue during the period, fell 2.3% compared to the same time in 2018.
The October announcement that Molson Coors would axe between 400 and 500 jobs did not include the closure of the Irwindale brewery in California, which means that many more workers could be shed from the business by the end of the year.