Construction of a $500-million Adolph Coors Co. brewery in Virginia's Shenandoah Valley will be delayed because of poor sales that have plagued the Colorado-based company, its top marketing executive said in an interview with a Denver business magazine this week.
Peter H. Coors, senior vice president for marketing and son of company President Joseph Coors, told Colorado Business magazine that the company won't begin work on the plant in the immediate future. "It would be stupid to put several hundred million dollars into the ground to build a white elephant," he said.
Coors said the company, the nation's fifth-largest brewer, still plans eventually to build its first East Coast plant at a 2,000-acre site in Rockingham County, but that its sagging sales in the West, where Coors once reigned as king, has made expansion a more distant prospect. The company never had given a specific date for when it would begin construction of the Virginia plant, but it was expected within the next two years.
"Eastward expansion is still an opportunity," Coors told the magazine. "But until we're satisfied we have things moving right in our existing territories, it doesn't make sense to bite off more than we can chew."
Sagging sales this year threaten to push Coors into sixth place among the nation's top brewers. Despite ballooning budgets for advertising, which have cut heavily into the company's profits, Coors appears to be losing an intense battle with beer giants Miller Brewing Co. and Anheuser-Busch on the West Coast.
Coors share of the vast California market, once as high as 41 percent, has sunk to 18 percent. Since 1976, the company has experienced virtually no growth in beer sales, while its advertising budget in the same period has climbed from about $10 million to nearly $68 million this year.
Profits for the first three quarters of 1981 were down nearly 33 percent from the same period last year, from $62.5 million to $42.1 million.
"There's no question we've got some serious problems," Coors said in the interview. "Miller and Anheuser-Busch are chewing up the industry. The fact we've stayed steady is a near miracle."
In a statement yesterday, Joseph Coors stressed that the Rockingham County facility will be built, but declined to say when. "We would not have purchased nearly 2,100 acres of prime Virginia land if we were not serious about eventually building," he said.
In the several years the company was looking for a site for a new brewery, it has been notably circumspect about saying when the plant might be built. In May, Joseph Coors and a throng of Virginia's political luminaries--including Sens. John W. Warner (R) and Harry F. Byrd Jr. (I) feted the company's selection of a site near Harrisonburg with a huge party under an acre-sized tent.
County officials hope to see the facility bring thousands of new jobs and millions of dollars in additional revenue to the area. Officials yesterday said that a local Coors representative had assured them that the company had not changed its mind.