Tilray to save $20m with US brewery cuts

Tilray Brands is restructuring its U.S. beverage operations, consolidating its brewing footprint from 10 facilities to six and targeting approximately $20 million in annual or annualised cost savings by the end of fiscal 2028. The moves include brewery closures, portfolio simplification and distribution changes aimed at reducing operational complexity and strengthening margins across its beer business.

The cost-saving programme spans the next two years and beyond, with the majority of incremental benefits expected to materialise by the end of fiscal 2028. Management expects a more efficient cost structure to support margin expansion and stronger earnings in U.S. beverage operations while creating flexibility to reinvest in brands and growth categories.

As part of its brewery optimisation efforts, Tilray has closed Hop Valley’s Eugene brewery, Redhook Brewlab and Revolver’s brewery, trimming its physical brewing network to six U.S. facilities. The company has also sold the Atwater brand and is considering the sale and monetisation of surplus brewing and warehouse sites made redundant by the restructuring.

Terrapin’s brewing production has been transferred from Athens, Georgia, to other Tilray facilities, while its taproom, warehousing and repackaging operations remain in Athens in a reduced role. Across the network, the restructuring also includes workforce reductions, though specific job numbers have not been disclosed.

Since January 2025, Tilray has reduced its U.S. beverage SKU count by approximately 28%, removing duplicative, lower-margin and slower-moving products. The company is prioritising investment in established regional brands, selected national offerings and higher-potential growth categories such as non-alcoholic beverages and functional energy drinks.

In parallel, Tilray has cut its U.S. distributor network by about 9% and expects to substantially complete further consolidation by the end of fiscal 2028. The company continues to pursue efficiencies across manufacturing, warehousing, procurement and logistics to improve brewery utilisation and reduce operating complexity.

The operational changes precede Tilray’s exclusive U.S. brewing and commercial partnership with Carlsberg, scheduled to begin on 1 January 2027. Using its existing brewing infrastructure, sales organisation and distribution network, Tilray will produce and commercialise Carlsberg’s portfolio in the U.S., including Carlsberg, Carlsberg Elephant, 1664 and 1664 Blanc.

The partnership targets approximately one million cases in its first year, providing additional volume to fill Tilray’s streamlined brewery network. The company expects to accommodate these volumes without a proportionate increase in fixed operating costs, which could improve capacity utilisation and operating leverage.

Tilray’s most recent quarter showed revenue of about $257 million, an increase of 23% year over year, while the company recorded a net loss of $40 million. Beverage revenue rose 82% to $101.5 million, with the increase tied to the $44 million acquisition of craft brewer BrewDog completed earlier in the year.

The company said its global beverage platform now represents roughly $500 million in pro forma annual revenue when combining consumer brands, brewing infrastructure, hospitality operations and distribution capabilities. Tilray has reaffirmed fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million, which already factors in anticipated benefits from the ongoing cost-reduction measures.

Tilray’s leadership describes the restructuring as a move to simplify U.S. beverage operations and optimise the brand portfolio rather than an exit from beer. The strategy centres on running a tighter network of breweries, fewer slower-selling products and a streamlined distributor base to enhance margins and profit generation.

The company expects that, with a more efficient cost structure and added volume opportunities from initiatives such as the Carlsberg partnership, its U.S. beverage operations can deliver margin expansion and stronger earnings over time, while enabling continued investment in brands and new growth categories.