In a landmark moment in Colorado beer history, Molson Coors announced Wednesday that it will relocate its North American headquarters from Denver to Chicago and cut up to 500 jobs across international offices.
The beer giant today employs 2,300 people in Colorado, according to Molson Coors. About 300 of the employees work in the Denver office, and "many of these people will be offered jobs and moving packages to remain in the company and their team," said Matt Hargarten, Molson Coors & # 39; senior director of corporate communications, to Denver Post Wednesday.
He couldn't estimate how many of the 400-500 job cuts 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 201
The company will continue to operate its Coors distribution wing in Colorado, but also the Blue Moon Brewing facility in Denver's River North, smaller brand divisions such as 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 the 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 Coors Brewery. "A lot of (renovations) are upgrades, and a lot of it creates more flexible operations."
Hargarten could not say how non-brewing jobs at the Golden plant would be affected by the company's operations. relocation of headquarters. When it comes to changes in the brewery itself: "It's a huge investment," he said. "It's being felt, let's say it like that."
Coors was started in Golden in 1873 by German immigrants Adolph Coors and Jacob Schueler and was originally called the Golden Brewery. More than 130 years later, in 2005, Coors merged with Molson to create the fifth largest brewery company in the world. And in 2016, Molson completed Coors Brewing Co. the acquisition of MillerCoors, making it the third largest brewery company in the world.
"For nearly 150 years, we have brewed good beer in Colorado, and we will continue to brew great beer 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 provide greater flexibility, enable us to move in line 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 Coor's four divisions operated in the U.S., Canada, Europe, and internationally.
From January, the company will also change its name from Molson Coors Brewing Co. to Molson Coors Beverage Company. This signals a transition 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 on the path we have been going for years now, or we can make significant and difficult changes that are needed to get back on track."
Bart Watson, chief economist at the Boulder-based Brewery Association, says that Molson Coors faces major problems with lower overall market share and a network of breweries (after merging with Miller Brewing) "that was not designed for a single company."
"This is a challenge that is not unique to Molson Coors, and is also felt by the market leader, Anheuser Busch," Watson said. "The beer market has received a premium, with beer lovers increasingly choosing craft beer and imports, and it has hit the two market leaders hard. "
Molson Coor's announcement on Wednesday followed news that the company's net sales revenue had fallen by 3.2% in Q3 2019. The share price of Molson Coors was down 3.31% from 12 noon: 01 Mountain Time Wednesday, trading for $ 52.87 per share.
"(Molson Coors) has been struggling with volume and stock losses for more than a decade at this time," Watson added. "By the end of 2019, volumes are more than 15 million barrels lower than the (brewery's) peak in 2008. For consistency, the total market in Colorado is below 5 million barrels, so the company has lost correspondingly more than three Colorado markets in the last 11 years. ”
But back in Golden on Wednesday, it was business as usual at Coors Brewery, amid the blizzard of the week and an icy four-day cold front. The brewery continues to be the only producer of Coors Banquet beer, and it will continue to do so, according to Hargarten.
"This company has a long tradition here in Colorado, and we don't want our community partners to think we are going away from it," he said. "Even after all this is done, we will have more employees in Colorado than anywhere else in the world.
" (The Coors Brewery) will actually be strengthened, "Hargarten added." It's going to be future-proof, so it's here … for another 150 years. "