BOULDER — Boulder Beer Co. will discontinue distribution of its beers to grocery stores and lay off more than 40 percent of its staff as part of a larger business downsizing.

In a statement to BizWest, the brewery blamed severe competition from other craft breweries across the country drawing away dollars from retail and distribution sales for its decision. The company will continue to operate its brewpub at 2880 Wilderness Place.

“Boulder Beer has been part of my life for close to 30 years, as it has been for so many of our loyal friends and patrons, and we all want to see it live on,” owner Gina Day said in a prepared statement. “…“Times have changed and change is hard, but I’m ready to put the ‘fun’ back in beer.”

Boulder Beer currently distributes in 29 states across the U.S., according to its website.

Spokeswoman Tess McFadden said 21 employees out of approximately 50 will lose their jobs over the next month or so as the company wraps up its final orders with distributors. The job losses will mainly affect the distribution and canning department, along with sales staff and some brewers.

The company looked at downsizing its distribution footprint down to a smaller footprint or just to Colorado itself, but McFadden said it didn’t make financial sense to only sell in the state at the scale of beer it could produce with current equipment.

“The numbers just didn’t really work to do that,” she said.

She declined to specify how much ending distribution would save the brewery annually.

McFadden said the brewery will sell off its larger brewing system and replace it with one that can handle production for the brewpub, along with its canning and additional production equipment. The brewery may turn the cleared-out production areas into event space sometime in the future, she said.

“The opportunity is there, but for now, we’re going to just hunker down and focus on the pub,” she said.