Chicago-based Molson Coors made a surprising announcement yesterday, revealing its first-ever spirits acquisition. The beer giant has acquired Blue Run Spirits, a bourbon and rye whiskey-maker based in Kentucky. The move is part of Molson Coors’ efforts to expand its product offerings beyond beer and tap into the growing spirits market.

By acquiring Blue Run Spirits, Molson Coors will more than double its spirits team, according to a news release. Mike Montgomery, co-founder and CEO of Blue Run, will become vice president of Molson Coors’ Coors Spirits Co., which will house Blue Run as well as the company’s previous ventures into whiskey, Five Trail Blended American Whiskey, and Barmen 1873 Bourbon.

In an interview with the Tribune, Michelle St. Jacques, Chief Commercial Officer of Molson Coors, described Blue Run as one of the hottest new entrants in the whiskey industry. She explained that Molson Coors shifted its focus to become a total beverage company three years ago, aiming to strengthen its core beer brands while also premiumizing and expanding beyond beer.

Blue Run will continue with its plans to build a distillery in Kentucky by 2025. The brand, which launched last year and has already garnered numerous bourbon awards, has announced its intention to release three new whiskeys later this year. Blue Run’s whiskey is often produced in small batches, creating an air of exclusivity that attracts avid bourbon enthusiasts.

The acquisition comes as Molson Coors looks to relocate its Chicago office from Wacker Drive to BMO Tower in the West Loop next summer. The company had previously announced plans to move its North American headquarters from Denver to Chicago in 2019, as it sought to expand beyond beer and tap into emerging beverage trends.

In recent years, Molson Coors has faced competition from craft and imported beer, as well as the rising popularity of hard seltzers. To keep up with evolving consumer preferences, the company expanded its product offerings, launching a hard coffee and a canned wine in 2019. Last year, Molson Coors partnered with Coca-Cola to create Topo Chico Hard Seltzer.

The beer giant’s efforts to diversify its portfolio have paid off, with net sales reaching nearly $3.3 billion in the second quarter of this year, up 11.8% from the same period last year. This marks the company’s strongest quarter since the merger of Molson and Coors in 2005, according to an earnings release.

When asked about the decision to venture into spirits, David Coors, executive chair of Coors Spirits Co., revealed that the company had recognized the growth of the whiskey category. He noted that the initial stages of whiskey production are similar to the beer-making process. The move into spirits marks a departure from the company’s beer-centric identity.

David Coors also shared an interesting anecdote from his college days. He had once told his father, former Molson Coors Chairman Peter Coors, that the company should make a whiskey. However, his father responded by saying, “We’re good at one thing, and that’s beer.” Despite this initial sentiment, the company has now made its foray into the spirits market with Blue Run Spirits.

While Molson Coors hasn’t ruled out introducing other spirits to its portfolio, its current focus remains on whiskey. The acquisition of Blue Run Spirits is a strategic move that reflects the company’s commitment to expanding its product offerings and remaining competitive in an ever-changing beverage market.