This week, MillerCoors announced the closing of its Irwindale brewery which comes as no surprise for beer industry people. Pabst Brewing Co. has an option to purchase the brewery but their window to exercise this option is short. Pabst’s response might give the industry an insight of the brewer’s future.
A day after the MC announcement, a local Ft. Worth brewer, The Collective Brewing Project, announced it had closed. The Collective Brewing Project, founded in 2014, was noted for their wild and sour beers. The timing of both closings is ironic in that the industry is simultaneously experiencing the cessation of both one of its largest and smallest breweries.
It will be a while before the industry publishes its final 2019 numbers, however, we do know that there are currently over 8,000 working breweries in the States. What will be interesting is the ratio between the number of breweries opening verses the number of breweries closing. For years the number of those opening has dwarfed the number of those closing, however, that difference has recently narrowed. The day is coming soon when we will experience more closings than openings.
Aside from the dramatic size difference between MC and The Collective Brewing Project, the two breweries have one thing in common: neither brewery is selling beer. If they were selling, the plants would not be shutting down. MC does have the funds to keep their brewery open, but they are obviously trying to stay ahead of the costs and maintain production capacity at their other two breweries. The Collective Brewing Project probably has a similar sales trend, however, the owners may have decided that enough is enough and they want to limit their financial exposure by pulling out. Neither brewery is growing or offering beers that consumers are eager to purchase.
The new leadership at MC seems to grasp reality and has started to adjust the company to ensure the structure fits the current sales and market position. This does not mean that each quarterly financial statement that reports a loss of sales will be followed by a statement of MC’s increase in market share. Traditionally, MC looses sales, but increases share of market with their light beers, but this only means their losses are less than AB’s losses.
Like more and more struggling breweries who finally call it quits and move, on MC and The Collective Brewing Project did what each had to do. People will lose their jobs, money will be lost, dreams will end, but that is the beer industry today. Needless to say, 2020 will be interesting, but the condition of the industry in 2030 will really be attention-grabbing.
Sometimes we stare so long at a door that is closing that we miss the fact that another that is opening.