In an effort to cut costs amid declining sales, MillerCoors will close one of its eight U.S. brewing facilities, the company announced today.
MillerCoors plans to close its Eden, N.C. location in September 2016. A transition plan is still being finalized, but MillerCoors will “gradually” begin exiting the facility in early 2016, a company spokesman told Brewbound.
Job cuts will not begin until 2016, the spokesman said.
“Today we made the difficult decision to close our brewery in Eden, N.C., in order to optimize our brewery footprint and streamline operations for greater efficiency across our remaining seven breweries,” chief integrated supply chain officer Fernando Palacios said in a press statement.
MillerCoors, a joint venture between SABMiller and Molson Coors Brewing, owns the property in Eden and currently employs about 520 individuals at the facility. In 2014, it produced 7.1 million barrels of Blue Moon seasonal offerings, Coors Light, Miller Lite and High Life. The facility, the first to produce Miller Genuine Draft, has a total capacity of 9 million barrels.
Declining sales and proximity to its Elkton, Va. facility — which employs 450, has the capacity to brew upwards of 8 million barrels annually and is closer to Northeastern markets — were driving factors in the decision to close, the company said.
“Since the creation of MillerCoors seven years ago, volume has declined by nearly 10 million barrels,” the company statement said. “This volume loss is due to a variety of factors, including economic challenges, an explosion of choice and fragmentation within the beer business, and a dramatic change in the way consumers engage with brands. As a result of declining volume, MillerCoors breweries are operating at an increasingly inefficient capacity.”
In 2007, the Elkton, Va. location underwent $300 million in renovations. It is MillerCoors’ most modern brewery, a spokesman told Brewbound.
Over the next 12 months, products currently made in Eden will be transitioned to other breweries, including Elkton, Va. as well as facilities in Ohio, Texas, Georgia and Milwaukee. The company currently operates out of 8 production facilities, not including its smaller Leinenkugel and Blue Moon locations.
In the statement, MillerCoors also said it expects additional volume declines over “each of the next few years.”
The decision to close the brewery comes just days after two major announcements: last Tuesday, MillerCoors named interim CEO Gavin Hattersley as its permanent leader. Two days later, the company acquired San Diego-based craft brewery, Saint Archer Brewing.
Year-to-date MillerCoors volume sales are relatively flat, according market research firm IRI Worldwide. Through August 9, off-premise sales in multi-outlet and convenience stores were down just 0.2 percent.