Woe is the macrobrew. Sales of mass-produced beers have stagnated in recent years thanks to the ascendance of craft beer and growing popularity of non-barley beverages such as seltzers, hard cider, and iced coffee. So, despite the prominence of the West’s brewing industry, the region’s iconic large and midsize brewers have undergone a period of turmoil — one that, last month, cost the West its most iconic beer company.
On October 30, Molson Coors Beverage Company, the parent of Coors Brewing, announced it would move its headquarters from Denver to Chicago. Coors isn’t the first Western brand to achieve prominence and then skip town, and its iconic brewery and canning facility will remain in Golden, Colorado. But this departure has a particular sting. Coors is older than the state itself. While Molson Coors’ departure, and the loss of 300 jobs, surely won’t tank Denver, the company’s flight offers an interesting vantage on Denver’s reputation as a headquarters city and the state of the Western beer industry.
In a release announcing the headquarters move, Molson Coors CEO Gavin Hattersley said his company was at an “inflection point.” Sales in the latest quarter were down 3.2 percent. Using federal tax data and reports from Beer Marketer’s Insights, Bitterroot calculated that Molson Coors sold 15.1 million fewer barrels of Miller, Coors, and other domestic brands in 2018 than it did a decade prior.
“We can continue down the path we’ve been on for several years now, or we can make the significant and difficult changes necessary to get back on the right track,” Hattersley said.
The changes deemed necessary, company spokesperson Matthew Hargarten told Bitterroot, included Molson Coors’ headquarters move. Consolidating offices — and trimming some 500 high-paying jobs — will save the company about $150 million, and that money will be used to revamp the company’s brands and develop new beverages. Indeed, Molson Coors recently bought a 49 percent stake in L.A. Libations, the Southern California-based seller of things like aloe vera water and keto-vegan-paleo shakes.
Acquisition and product-development operations will be streamlined in Chicago, where a big chunk of the company’s marketing staff already is located. In Colorado, the Coors brewery in Golden will remain, as will the more than 2,000 employees there.
“Colorado is always going to be the cornerstone of our business,” Hargarten said. “Coors Banquet is going to be brewed exclusively in Golden. We’re also investing hundreds of millions of dollars into our Golden brewery.”
Molson Coors’ move comes as the firm is seeking innovation, and Chicago is indeed a food and beverage industry hotspot — firms such as Kraft Heinz and Conagra Brands call it home. But Molson Coors is leaving a city others are turning to for the same reason.
“Denver is such an entrepreneurial space,” said Melissa Archpru Akaka, co-director of the Consumer Insights and Business Innovation Center at the University of Denver. “By exiting, [Molson Coors] might lose out on some opportunities to bring in talent that is more innovative and entrepreneurial.”
Indeed, many Chicagoans these days are following the trail of Adolph Coors, himself, who moved to Denver from Chicago to open his eponymous brewery in 1873. From 2013 to 2017, more than 3,000 people relocated to the Mile High City from the Windy one. One such transplant is Sam Bailey, who moved to Colorado in 2007 to attend college and stuck around. “It was a place where young people wanted to be. I could enjoy all four seasons. And it’s just a forward-thinking community that’s politically dynamic,” he said.
Bailey today is a vice president at the Metro Denver Economic Development Corporation. While losing Coors HQ hurts, Bailey echoed the sentiment of many that the loss is largely symbolic. Newcomers are still flocking to Denver, and business formation in the city is solid. Plus, keeping the brewery itself around is a nice concession.
“In the grand scheme of things … I feel better about the loss of the office jobs, because we have employers who can absorb that, versus the displacement of 2,300 workers in a brewery production facility,” Bailey said. “That’s a different kind of workforce.”
But, as we’ve learned from many U.S. industries, mergers and corporate relocations can fray production ties, and beer is no exception. Consider the fate of two former regional stalwarts, Olympia and Rainier. The Washington breweries began operating in Tumwater and Seattle, respectively, in the 1890s, and built robust operations over the next century. As with Coors in the Mountain West, their stranglehold on distribution made them ubiquitous at bars in the Northwest. Marketing campaigns hinged on regional pride; just as Coors promotes its Rocky Mountain water origins, Olympia’s logo featured an image of Tumwater Falls with the tagline: “It’s the water.”
Amid a flurry of mergers and acquisitions in the 1980s and ’90s, Rainier’s iconic Seattle brewery was shuttered, and the iconic Tumwater brewery was sold to Miller, where it brewed several regional brands including Rainier and Olympia. That arrangement was short-lived, though; Miller closed the picturesque waterfall-adjacent brewery in 2003, costing 400 people their jobs. Oly and Rainier today are owned by Pabst Brewing and produced in Irwindale, California. So much for that Tumwater terroir.
Hargarten, the Molson Coors spokesman, and Bailey with Denver’s EDC both touted that Coors Banquet will still be produced exclusively at the Golden facility. And the promised brewery upgrades only deepen the company’s ties to the facility, Hargarten said. But the tale of Olympia and Rainier show that out-of-town bosses aren’t always keen on adhering to historical production. Coors Light already is produced with water well outside the Rockies. In addition to the Golden facility, the Silver Bullet is brewed in Wisconsin, Georgia, and the same California brewery that pumps out Rainier and Olympia.
Of course, the market trends that led to the downfall of Rainier and Olympia’s Northwest operations are different from those facing Molson Coors today. You wouldn’t find kombucha on tap in 1999, and back then, craft breweries were just starting to emerge. Rainier and Olympia were mid-sized breweries, not craft or conglomerates.
Even the upstarts that disrupted Molson Coors are now being snapped up. Fort Collins-based New Belgium Brewing, the fourth-largest craft brewer in America, announced it was acquired by Australia-based Lion Little World Beverages, a subsidiary of the Japanese mega beer brand Kirin Holdings Company.
Should Lion Little want to grow its Colorado presence, at least there is some downtown Denver office space available.
