The MillerCoors brewery in Irwindale has fallen victim to a years-long slump in sales of light beer. Now the plant’s owner, Molson Coors Beverage Co., says it plans to close the facility — scrapping 470 jobs — by September.
However, Molson Coors also said it struck an agreement with smaller rival Pabst Brewing Co. that gives Pabst the option to buy the 225-acre Irwindale facility for $150 million within the next four months.
Los Angeles-based Pabst — which little more than a year ago contended that its very existence depended on the partnership in which MillerCoors brews its beers — said Tuesday that it would “evaluate this opportunity” and make a decision that’s “in the best interest of all our stakeholders.” The brewer declined to elaborate.
The 40-year-old Irwindale plant, located alongside the 210 Freeway, brews several brands for Pabst in addition to Miller Lite, Coors Light, Miller High Life and other Molson Coors brands.
The brewery’s 470 employees face layoffs unless there are openings elsewhere in the company for which they can apply or unless Pabst acquires the site, said Molson Coors spokesman Marty Maloney.
“Our core brands have seen years of volume declines,” Maloney said. “The lost volume means our breweries aren’t operating at an efficient capacity level. The production can be absorbed by other breweries in our network.”
The company has seven U.S. breweries overall, and it said most of Irwindale’s production would shift to its plants in Golden, Colo., and Fort Worth.
The Irwindale brewery produced 4.8 million barrels of beer last year, which was shipped to 261 distributors for sale mostly in the western United States.
U.S. shipments of light beer have tumbled in recent years, and overall beer shipments have been relatively flat.
Many people are forgoing light beer in favor of full-flavored, more expensive craft beers, wine and spirits, said Eric Shepard, executive editor of the trade journal Beer Marketer’s Insights. Soaring sales of hard seltzers, such as White Claw — which tout their low calorie levels, among other things — also have eroded light beer’s popularity.
Although beer formerly was the alcohol favored by many consumers in their early drinking years, “millennials are much more promiscuous in terms of what they start drinking and then later drink regularly,” Shepard said.
Light-beer shipments totaled 58 million barrels in 2018, down 17% from 70 million barrels in 2013, according to Beer Marketer’s Insights. Over the same period, total beer shipments edged down to 206 million barrels from 207 million.
The top-selling light beer is Bud Light, made by Anheuser-Busch InBev, with 14.5% of the market, Shepard said. Coors Light is a distant second with 7.3%, followed by Miller Lite at 6%. Pabst is a minor player in the light-beer segment.
Shepard called Molson Coors’ plan to shut the Irwindale brewery “a surprise to virtually no one,” not only because of the slump in light-beer sales but also because of restructuring efforts at Molson Coors and because prior litigation between MillerCoors and Pabst had indicated that the Irwindale facility might be vulnerable.
Molson Coors — the product of mergers involving Molson, Coors and Miller — announced a “revitalization plan” in October aimed at streamlining the company and enabling the firm to invest more in higher-priced beers along with other non-beer drinks such as wine. The firm also changed its name from Molson Coors Brewing to Molson Coors Beverage “to better reflect its strategic intent to expand beyond beer.”
Pabst, maker of Pabst Blue Ribbon, is privately owned by the investment firm TSG Consumer Partners and beer entrepreneur Eugene Kashper.
Pabst sued MillerCoors in 2016 alleging that MillerCoors had tried to destroy it by attempting to get out of its contract to brew Pabst’s beers. During the litigation, it was learned that MillerCoors had said it might eventually have to shut the Irwindale plant, the Associated Press reported at the time.
While jurors were deliberating after a two-week trial in November 2018, the two sides settled the lawsuit. Along with the agreement announced this week, any remaining claims related to that litigation have been dismissed, Molson Coors said.
The Irwindale plant was among the California breweries that made substantial changes to cut water consumption during the state’s drought in recent years.
MillerCoors slashed the site’s 20 acres of plush grass in half and made changes inside the brewery, such as switching metal conveyor belts to plastic ones that don’t have to be sprayed with water to help the bottles slide.