Molson-Coors to close Irwindale brewery

I would have thought they would have determined that before investing $150 million.

 

Pretty weird, huh? Did the bank exec that approved that loan read it and think, "WTF?"

 

...and Pabst just sold Irwindale to contract-brewery City Brewing Co. (with breweries in La Crosse, Latrobe and Memphis) and, at the same time, became a major investor in City, according to Beer Marketers Insights' email newsletter:

More info at https://www.businesswire.com/news/h...est-Coast-Facility-and-New-Investment-Program

* So, approx. 4 million bbl / 8 millon bbl. MC listed the capacity of the brewery at 7M bbl/yr.

Back in Nov. '19, Pabst announced they would transfer most of their brewing from Molson Coors to City by the end of 2024.

 

@jesskidden that is indeed interesting news. I have been wondering whether Pabst was truly committed to becoming a genuine brewing company where they would actually produce their beers. It would seem that the answer to that is no but they instead found a partner (City Brewing Co.) who will take responsibility for brewing operations. This would permit Pabst to mostly operate as a marketing/distribution business. Perhaps this is the optimum solution here?

Cheers!

 

Well, I'd say it's a bit more complicated than that since Pabst's current ownership group, "Blue Ribbon Partners", now also has "a significant ownership interest in City Brewing", so, in a way, they are tilting back towards being a brewery and away from the "virtual brewing company" model they've used since around 2002.

Of course, Pabst since the early '80s, under their 3 previous owners, has been having some of their brands contract-brewed by competitors (Heileman, Stroh, Miller/MillerCoors) as well as by City, The Lion, F X Matt, Detroit, CBA, 21st Amend., etc.

I'd imagine that owning part of City will give Pabst more influence over the brewing of their beers then they had with MillerMolson Coors.

Although I'd assume City's other major customer, Mark Anthony (Mike's/White Claw), probably has a lot of say, too. They passed Pabst in barrelage back in 2019, IIRC. Although MA is building their own "facilities" (not really "breweries" are they?), too. Have never seen a breakdown of White Claw's production - percentage made in-house, by City, by Genesee (I think?), etc.

 

This local article says that Pabst had signed a long-term contract brewing agreement with City until 2040. I'd guess that may also give them more influence as well.

 

Yup, as mentioned in an earlier post

https://www.inside.beer/news/detail/usa-pabst-to-move-production-to-city-brewing.html

 

You expected me to remember that, or scroll up to posts from a few months ago?

 

More reporting from BMI reveals Pabst's principal owner Blue Ribbon Partners will be the new majority owner of City, at 53%.

 

JK, I am trying to figure this whole ownership structure aspect:

It is my understanding that Pabst Brewing Company is wholly owned by Blue Ribbon Intermediate Holdings, LLC.

And now Blue Ribbon Intermediate Holdings, LLC is the majority owner of City Brewing.

Do I understand this correctly?

Cheers!

 

Yeah, appears to be the case - today.

Well, when that "Blue Ribbon" group bought it from the Chef BoyArDee/Bumble Bee Tuna/Vlasic Pickles people (Metropoulos family), TSG Partners was also part of the BR purchasing group. Don't know if that's still the case (Pabst logo still on the website). TSG might sound familiar 'cause they also own minority shares in BrewDog and Sweetwater.

https://www.tsgconsumer.com/news/pabst-brewing-company-completes-sale-to-blue-ribbon-holdings

https://www.goodbeerhunting.com/sightlines/2017/4/8/tsg-partners-acquires-22-of-brewdog-for-100m

At the same time, City-Latrobe lost the Pittsburgh/Iron City brands contract, because they're building a new brewery:

https://triblive.com/local/valley-n...ewery-at-former-ppg-glass-plant-in-creighton/

Not a big loss for Latrobe, tho'.

 

What a convoluted mess, they must lay their accountants well to keep all the books straight. Sounds like a mess the IRS couldn’t even figure out, maybe it’s the beverage equivalent to cleaning money in off shore accounts.

 

Ever take a look at Boston Beer's Annual Report's list of Breweries and List of Subsidiaries and Affiliates?

 

Lol, good grief, imagine Diageo.

 

Outside the Irwindale facility, what excess capacity is available in the west? I think the answer is none, excepting at the larger craft brewers (Lagunitas, Deschutes, . . .). City has midwestern capacity, but it's almost 2000 miles to the west coast. Irwindale, being more modern, probably has lower production costs, too. It might be cheaper to shut either LaCrosse or Memphis and bring Irwindale online. (assuming Pabst and malternative sales don't collapse).

 

Seems everything in the West is being consentrated in Golden. Noticed my Rainier was already brewed there.
Bad times for the majors

 

My thoughts too. Well Full Sail in Oregon had a large brewery and hardly any sales anymore. They should contract out the Rainier beers there.

 

Old Chicago is to Chicagoans as Iron City is to Pittsburghers. Allegiance does not a good beer make. I cannot stand the aroma of Iron City. The huge diaspora of Pittsburghers and far-flung Steeler bars keeps IC/IC Light rolling along. I sold Iron City for a number of years and the IC fans can seem rather cultish...I'll bet it's the same for Old Chicago.

 

Old Chicago is just a restaurant/tavern chain, right @Bitterbill ? No relationship to the "Old Chicago" beer brand that Huber brewed when he owned the Peter Hand (ex-Meister Brau) brewery.

In February Pittsburgh (Iron City) announced they're pulling out of City-Latrobe and building a new brewery in an old glass plant the owner of PBC owns.

So, IC and related brands is down to 75-100k bbl., not quite where they were in the late '60s when they broke 1 million bbl. mark and hovered just below that into the 1980s (when Jim Koch and Joe Owades came knocking...).

City announced it wouldn't affect them much because:

Didn't Miller (pre-merger) use Full Sail for some Henry Weinhard production initially after buying the brand in '99, to keep some of it "Oregon-brewed" ?

Yeah, but at this point why would Pabst/City move anything after taking over Irwindale, with its 7 million barrel capacity? That brewery alone can brew more beer than Pabst sells these days (4.5 M bbl., in 2018 and, IIRC, they've been going down every year since buying the Heileman/Stroh brands and closing their breweries).

And for economic reasons, Pabst/City will likely brew the Pabst brands in their other regional breweries, too, which ever is closer to the brands' traditional markets.

 

As @jesskidden mentioned, I was referring to the chain Old Chicago.