Molson Coors stages exit from the craft beer industry

Molson Coors is divesting its four craft beer brands and shutting down its own craft label as the brewing behemoth exits an industry it once longed to access.

Why it matters: The whiplash further signals that big beer makers are no longer enamored with craft brands as that slice of the market posts negative growth for the first time in its history.

Driving the news: Molson Coors announced Tuesday the sale of its craft beer portfolio — Hop Valley in Oregon, Terrapin in Georgia, Revolver in Texas and Atwater in Michigan — to Tilray, a Canadian company with interests in cannabis and beer. The financial terms of the deal were not disclosed.

• In addition, Molson Coors announced it would shut down its Colorado-based, in-house craft brand AC Golden at the end of September, according to a memo obtained by Axios.

What they're saying: Molson Coors chief commercial officer Michelle St. Jacques said the moves allow the company to focus on its premium national brands, Blue Moon and Leinenkugel, as well as non-beer alcoholic beverages, such as seltzers and hard cocktails.

• "As we map our path forward, we recognize we need to sharpen our focus on the segments where we see the greatest opportunity for our collective businesses," she wrote in the memo to wholesalers.

Flashback: Global beer makers like Coors and Anheuser-Busch rushed to acquire craft beer brands at the height of their boom a decade ago, but fortunes have shifted.

• The overall beer industry sank 5% in production volume in 2023, but saw retail sales increase 3%. Meanwhile, craft beer production decreased 1% — its worst number since the industry came into view in the 1970s.
• AB InBev divested eight craft brands , including Breckenridge, 10 Barrel and Shock Top breweries, to Tilray last August.
• Constellation Brands sold its craft breweries — including the billion-dollar Ballast Point — in recent years.

The intrigue: Tilray's two acquisitions from big beer makers now positions the company as one of the five largest craft brewers in the U.S.

• "Tilray Brands plans to continue to invest in the future of these craft breweries, accelerating their growth and capturing a wide range of new market opportunities," Irwin D. Simon, Tilray's CEO and chairman said in a statement.
• "Tilray Brands is a beacon for craft brands, and we are committed to driving their growth and success within our portfolio."

Between the lines: To earn the "craft beer" seal , it must meet the definition of small and independently owned, set by the industry's trade group, the Colorado-based Brewers Association.

The bottom line: Now that Tilray is the owner, all four of its new brands will qualify as craft — a symbolic but significant indicator to consumers.