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.

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. 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.

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’s announcement 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 trucking its waste more than 75 miles to Cortez twice weekly for disposal.