Molson Coors To Acquire Chicago's Cruz Blanca

Fresh off two trips to the podium at last weekend’s Festival of Barrel-Aged Beer, Cruz Blanca has been sold to Molson Coors, according to rumors confirmed by sources close to the deal. Just two months after selling their craft portfolio to Tilray Brands, Chicago-based MC is back in the craft beer business. These two breweries are no strangers, as Cruz Blanca’s recent expansion to Texas led to a partnership with Molson Coors-owned Revolver Brewing, which was part of the Q3 divestiture. The proximity of Cruz Blanca to Molson Coors HQ—less than two miles—gives them a showpiece brand in their home city, but it’s likely Cruz Blanca’s small size and national potential that makes this deal most attractive.

Quick Reactions:

• Cruz Blanca only reported about 500 BBLs of production to the Brewers Association in 2023, but that’s likely just their Brewpub volume coming out of their West Loop restaurant. The rest of their volume is contract brewed and likely accounted for in other brewers’ volume. I’d assume it’s somewhere in the the 4-figure range, leaving immense upside for Molson Coors for a small purchase price by their standards.

• Cruz Blanca has always had big aspirations for their modern, Mexican-inspired brand, but the ability to scale production and distribution was always going to be a challenge. The ability to survive independently on contract-brewing margins likely had met its end game.

• For Molson Coors, they gain a premium brand built organically, with national potential. This positions them to go after the massive Hispanic audience currently dominated by Constellation (Corona, Modelo, Pacifico).

• Don’t expect Molson Coors to refer to Cruz Blanca as a “craft brewery”, which their distributors are less likely to embrace. This play will be positioned as a strategy to get placements alongside these Mexican Import brands.

  

  Cruz Blanca Head Brewer Jacob Sembrano & Perennial Owner Phil Wymore showing me around the brewery during their Spring 2016 soft opening

• Going after those juggernauts may seem impossible from a competitive standpoint, but as far as prices, it’s not completely out of bounds given how high Modelo prices have gotten with every day 12-pack prices reaching $19.99 compared to a $12.99 6-pack of Cruz Blanca’s Mexico Calling. It’s a pretty standard price difference between craft 6-packs and 12-packs these days.

• It will be interesting to see if Molson Coors plans to continue the brand at craft prices, limiting its audience to those trading up, or get aggressive and use their scale to lower prices.

• With the lingering possibilities of Trump’s 25% tariffs on imports from Mexico and Canada, Cruz Blanca in theory would gain a significant pricing advantage with domestic production at Molson Coors facilities.

  

• Unlike Cruz Blanca as an independently owned brand, Molson Coors—its new parent company—has the ability to hand the brand to their national distributor network and activate it across the country instantly.

• EDIT: According to a source, Cruz Blanca will grow slowly and deliberately, with a focus on Chicago and one other large market in 2025 (details on that to come). 

• In many cases, Molson Coors shares a distributor network with Constellation, so their partners won’t be as motivated to disrupt the Constellation market as, say, the Bud network would, but the Mexican Import market is so massive that continuing to expand their dominance is still likely very much of interest to the Blue network.

  

This deal makes plenty of sense to me, with Molson Coors picking up a young, innovative, established brand with almost the entirety of the upside still intact, while obtaining a brewpub near their Corporate Headquarters. They get one of my favorite innovative brewers in the country, Jacob Sembrano—who per a source is staying on to scale the brand and future innovation, along with co-founder, Manny Valdes. (Edits in bold)

The question for me with all these deals is what success looks like. Do I think Cruz Blanca will disrupt Constellation? No, I don’t. Do I think it could provide a more premium landing spot for younger Hispanic drinkers looking for bolder and more interesting flavors? Absolutely.

While Molson Coors is technically getting back into the 'craft' market, I doubt that’s how they’re planning to talk about it at all. Instead, they’re getting (further) into the Mexican-inspired beer market and personally, I couldn’t think of a better brand to to do it with.