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MillerCoors said Monday it is closing its Eden brewery in September 2016 after 37 years, laying off 520 jobs as part of consolidating distribution along the East Coast.
There are 90 salaried and 430 full-time workers at the plant at 863 E. Meadow Road, said Marty Maloney, a media relations manager for MillerCoors.
“The (job) transition will happen gradually, and the first movements are planned for after the first of the year,” Maloney said.
County Manager Lance Metzler said the company sent employees home after they were informed of the closing.
“Today’s news is a shock,” Metzler said. “Our hearts, thoughts and prayers go out to these employees as we all come to grips that this outstanding corporate citizen will officially close September 2016.
“Our Rockingham County Economic Development Team will be working closely with state and local allies, such as N.C. Works and Rockingham Community College, to put a plan in place to assist the displaced workers.”
MillerCoors is the third-largest private employer in Rockingham County, trailing Unifi Inc. and Wal-Mart, and seventh-largest overall, according to Rockingham County economic officials.
Rockingham County already has the highest unemployment rate of the 14 Triad and Northwest N.C. counties at 7.1 percent in July.
When SABMiller Plc and Molson Coors Brewing Co. merged in 2007, the Eden plant had 639 employees. That was down from 739 in 2002.
“We made the difficult decision to close our brewery in Eden in order to optimize our brewery footprint and streamline operations for greater efficiency across our remaining seven breweries,” Fernando Palacios, the company’s chief integrated supply chain officer, said in a statement.
The company said there is “significant overlap in distribution” between Eden and the Shenandoah, Va., brewery, which is 200 miles away.
“Eden has been a strong performer over the years,” the company said.
In 2014, Eden produced 7.1 million barrels of beer, which were shipped to 280 independently owned distributors.
“However, Shenandoah is better suited geographically in relation to Northeast markets and is also the newest brewery in MillerCoors’ network.”
MillerCoors said that products produced in Eden will be transitioned to other breweries, including Shenandoah; Trenton, Ohio; Fort Worth, Texas; Albany, Ga.; and Milwaukee, Wis.
The company cited decreasing consumer demand for its products as another factor in deciding to close the Eden plant.
“Since the creation of MillerCoors seven years ago, volume has declined by nearly 10 million barrels,” or the equivalent of a single plant’s production, the company 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.”
The closing of the Eden plant is part of its strategy “to strengthen its overall portfolio to drive long-term growth in volume and share,” although it cautioned that continued volume declines are expected each of the next few years.
“We will work with community leaders to make sure we continue to support the community while we are brewing beer in Eden,” Palacios said.
Metzler said the brewery represents about $32.9 million of assessed tax value in real estate and about $132.6 million in personal property, such as business equipment inside the plant. For the 2015-16 fiscal year, the company already has paid Rockingham taxes of $1.2 million.
“We are fortunate the MillerCoors Eden Brewery is a state-of-the-art, high-tech facility with numerous natural resources and transportation venues,” Metzler said.
Michael Walden, an economics professor at N.C. State University, said the fragmentation of the beer market with the rise of micro breweries likely was the biggest factor in the decision.
“Change is always tough — unfortunately, Eden is on the losing end of this change,” Walden said.
Stan Kelly, president and chief executive of the Piedmont Triad Partnership, said it is “difficult to see the decision by MillerCoors to close their Eden brewery.
“The Triad is home to a diverse and growing industry base, and I am hopeful that these skilled employees will find other opportunities here as this plant ceases operations over the next 12 months.”