UPDATED April 9 at 11:33 a.m. to include interviews with the brewery owners.
Since 2011, Telluride Brewing Co. has made beer exclusively at its production facility in its namesake mountain town. But that will soon change.
According to a recent announcement, the brewery plans to relocate 83% of its production to Ska Brewing Co. in Durango, citing rising operational costs including expenses associated with wastewater management. Through the partnership, the brewery’s owners hope to save money and bolster revenue without having to increase beer prices.
Ska will begin brewing Telluride beers in mid-May.
Despite the move, Telluride Brewing Co. plans to keep its brewery and taproom in the Lawson Hill neighborhood open and active filling kegs for its Western Slope accounts. Brewers there will also use it for research and development of new recipes — it’ll be the “fun zone,” as co-founders Chris Fish and Tommy Thacher put it. The company’s taproom and restaurant in Mountain Village will also remain open.
Still, the shift will be dramatic. Telluride Brewing Co. typically produces more than 8,000 barrels of beer per year. It expects output will drop to about 1,200 to 1,400 barrels annually since packaged products will be made in and distributed from Durango.
Seven full-time employees were let go because of the change.
“I’d like to thank all my production staff. They crushed it,” Fish said by phone. “The hardest thing we ever did was let those guys go.”
Telluride Brewing Co.’s announcement comes as beer makers statewide struggle to survive in the post-pandemic economy. The costs of ingredients and real estate have increased, leading many businesses to form strategic partnerships to find efficiencies. Minimizing expenses is especially important as beer loses market share to other alcoholic beverage categories and more Americans embrace non-alcoholic options.
Dry Dock Brewing Co., for example, recently shuttered its 30,000-square-foot facility in Aurora and moved production to Great Divide Brewing Co. in Denver. The Mile High City’s TRVE Brewing also recently ditched its production facility and enlisted New Image Brewing Co. in Wheat Ridge to make its beer.
Being located in Telluride also presents unique challenges. The brewery attributes a sharp rise in operational costs to the town’s wastewater treatment plant, which needs upgrades. Both the price of water and wastewater treatment have skyrocketed, the brewery said.
Telluride Brewing Co. is the town’s largest contributor to Biological Oxygen Demand, meaning how much oxygen is needed to break down organic matter in water. Since February, Telluride Brewing Co. has tried to mitigate its impact on the treatment plant by storing its brewing waste in an empty fermenter before trucking it more than 75 miles to Cortez twice weekly for disposal.
The founders had never previously considered moving production offsite and, in fact, they purchased a 30-barrel brewing system in 2023 to increase efficiency. But the wastewater conundrum proved too costly — both financially and from an environmental impact standpoint — to overcome.
“We put our heads together and ran every scenario we could think of,” Fish said. “The only thing that really made sense was to move all packaged beer and beer we sell all over Colorado and Arizona to another brewery.”
The duo considered outsourcing to breweries in Denver, but settled on Ska because of the longstanding relationship the two breweries have had.
“Ska has been our distributor for many years. We were friends even before we served our first beer. From advice to everything, they’ve always been there for us. I’ve always joked they’re our big brothers,” Thacher said. “It’s nice to have this partnership and further it with people who we know, who we trust and who make fantastic beer.”
As part of the agreement, Telluride and Ska formed what they’re calling the San Juan Brewing Alliance, which will combine their buying power and economies of scale in hopes of making business more sustainable against the current market headwinds. Ska Brewing also offered employment to the staff at Telluride Brewing Co. who are willing to relocate to Durango.
Both Fish and Thacher were adamant they planned to maintain the brewery in Telluride.
“The new model, it works. We’re really excited because we don’t want to lose sight of the fact we always want to be able to brew beer in Telluride,” Thacher said.
