In a landmark moment in Colorado beer and business history, Molson Coors announced 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 employs 2,300 people in Colorado, according to Molson Coors. About 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, a Molson Coors spokesman, told The Denver Post on Wednesday.
Some executives may be offered the opportunity to relocate to Chicago, while some support staff may be offered positions in Milwaukee. The staffing changes will be made by the end of 2019.
After the Denver headquarters closes, Molson Coors will still have 2,000 workers in the state, mostly at the Golden brewery, as well as bottling and distribution operations. Colorado will remain the company’s largest employment base globally, Hargarten said.
The company will continue to operate its Coors distribution wing in Colorado, as well as its 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 its brewery in Golden,” according to a news release, to allow for “more flexible” brewing capacity and to increase supply chain efficiency.
RELATED: Why Coors Field’s name is not likely to change, even after Molson Coors’ HQ leaves Denver
“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. In 2008, Molson Coors and SABMiller merged, 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,” Gavin Hattersley, Molson Coors’ CEO and president, said in Wednesday’s news 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 about $150 million, leaving the brand with just two divisions in North America and Europe, according to the news release. Previously, Molson Coors operated four divisions in the United States, Canada, Europe and internationally.
State officials lamented the company’s decision. Michelle Hadwiger, global business development director for the Colorado Office of Economic Development and International Trade, called Coors synonymous with Colorado in a statement issued Wednesday.
“The difficult staffing decision to merge Colorado-based jobs into a central, out-of-state location is disappointing for many Colorado families,” she said, although her office respects the company’s operational decisions.
When asked Wednesday about the jobs leaving Denver, Gov. Jared Polis focused on the company’s investment to upgrade the Golden brewing facility. He said the investment “certainly ties the manufacturing side to Colorado over the long term, with major ungraded facilities along with hundreds of construction jobs over the next few years.”
Starting in January, the company will change its name from Molson Coors Brewing Co. to Molson Coors Beverage Co. This signals a shift to other non-beer products. In late 2017, Kandy Anand, the company’s chief growth officer, was touting new investments in non-alcoholic beer varieties for the North American market, citing their popularity in Europe. The brewery will also 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 news 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, said Molson Coors is facing bigger issues of lower overall market share and a network of breweries (after its 2008 merger with Miller Brewing Company) “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 Wednesday followed news that the company’s net sales revenues had decreased by 3.2% in the third quarter of 2019. Molson Coors’ stock price was down 3.09% at the close of trading Wednesday, finishing at $53 per share.
“(Molson Coors) has been struggling with volume and share losses for more than a decade at this point,” Watson said. “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 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 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.”
Other signs of Molson Coors’ ties to Colorado will remain intact: Coors Field, home of the Colorado Rockies, will keep its name thanks to a $200 million, 30-year lease agreement — signed in 2017 — that granted naming rights “in perpetuity” to Coors Brewing Co. and its successors.
As for the brewery in Golden, it’s “actually going to be bolstered” by the changes to Molson Coors’ company structure, Hargarten said. “It’s going to be future-proof, so it’s here … for another 150 years.”
Staff writers Aldo Svaldi, Joe Rubino and James Burky contributed to this report.