Molson Coors today said it plans to cease production at its Irwindale, California, brewery by September and has signed an agreement with Pabst Brewing Co. granting Pabst an option to purchase the facility. MillerCoors has brewed Pabst brands at its breweries around the country, including in Irwindale, since 1999.
In November, Pabst Brewing Co., a holding company headquartered in Los Angeles, California announced that it had entered into a 20-year contract production agreement until 2040 with City Brewing Company in La Crosse, Wisconsin. Under the agreement, Pabst planned to transfer its production from Molson Coors to City Brewing in the years 2021 to 2024 (inside.beer, 11.11.2019)
Molson Coors’ announcement of today seems to be a direct response in order to prevent an underutilization of its breweries for the years to come. Over the course of the next nine months, Molson Coors brands produced at the 40-year-old brewery will be transitioned to other Molson Coors breweries.
“This move will allow us to optimize our brewery footprint while streamlining our operations for greater efficiency across the network,” said Brian Erhardt, Molson Coors chief integrated supply chain officer, in a statement. “While it was a very difficult decision, we have extra capacity in our system and Irwindale’s production can be absorbed by other breweries in our network.”
The Irwindale brewery, which opened in 1980, produced 4.8 million barrels and shipped products to 261 distributors in 2019. Brands brewed at the facility include Coors Light, Miller Lite, Miller High Life, MGD, Steel Reserve, Miller64 and several brands for Pabst. It is the company’s lowest-volume brewery in the U.S.
“I want to be clear our decision in no way reflects the Irwindale brewery’s performance, which has been strong over the years,” Erhardt said in a note to employees and the company’s distributors. “We recognize this decision creates uncertainty for our employees in Irwindale, and we will support them throughout the transition. Although this decision was difficult, we are making it in the best long-term interest of the company.”
The decision to stop production at the brewery comes on the heels of a sweeping corporate restructuring and revitalization plan announced in October that is aimed at streamlining the organization and reinvesting USD 150 million annually back into the business around the globe (inside.beer, 30.10.2019). Ceasing production in Irwindale is not part of that plan and does not change previously announced cost savings guidance, the company said.