One of the most popular beers of the mid-1980s has lost its luster among American beer drinkers – and that’s forcing MillerCoors to shut down its Eden, NC brewery, putting 520 people out of work.
The plant, which was the first to brew Miller Genuine Draft, will begin shifting operations to the company’s Shenandoah, VA brewery, located 200 miles away, and will bottle its last beer in September 2016.
Fernando Palacios, chief integrated supply chain officer at MillerCoors, said in a statement the decision was made “in order to optimize our brewery footprint and streamline operations for greater efficiency across our remaining seven breweries.”
Miller Genuine Draft – or MGD, as it’s called by drinkers – came out of the gate strong in 1986 with a unique brewing style that avoided heat pasteurization, a process most bottled beers undergo. But the rise of craft beer and increased popularity of light macro beers has been devastating to the brand. Between 2007 and 2012, sales of MGD were off more than 56%.
MillerCoors says it has seen its overall volume drop by 10 million barrels over the past seven years – and it expects that trend to continue over the next few years due to “economic challenges, an explosion of choice and fragmentation within the beer business, and a dramatic change in the way consumers engage with brands.”
Fast growth of craft beer
Those declines coincide with a continuing surge of interest in craft beer. In the U.S., craft beers accounted for one out of every 10 beers sold domestically last year – with small and independent brewers accounting for 11% of the total beer market.
At the beginning of 2015, there were 3,418 craft breweries operating in the U.S. Compare that to just 44 breweries (large and small) in 1980 and 537 in 1991. By the end of the year, experts say, there will be a new craft brewery opening in the U.S. every 12 hours.
Beyond MGD, the Eden brewery brews Coors Light, Miller Light, Miller High Life and seasonal beers for the company’s Blue Moon label. This is the first factory MillerCoors has shut down since the merger of the joint venture between the two macro brewers occurred in 2007.
What about Miller Lite?
While macro beers are certainly feeling the impact from craft beers, they’re still the most popular beers in the country. And Miller Lite is among the most popular. As Fortune recently reported, MillerCoors sold 43 million more cans of Miller Lite in the second half of 2014 than it did in the equivalent period of 2013.
The company has also been expanding the offerings of its “craft” division Tenth and Blake. Last week, the unit purchased a majority stake in San Diego’s Saint Archer Brewing Co. (Beers from that division are the best performers at MillerCoors.)
The shutdown of the Eden, NC plant will likely have a ripple effect beyond the 520 people directly impacted. The small town has a population of just over 15,000 – and the plant was the largest employer. MillerCoors says it will continue to support the community for the next year.
There is some sliver of hope for the town, though. North Carolina is a friendly state for brewers. Both Sierra Nevada and New Belgium have breweries in Ashville. And Oskar Blues operates a facility in Brevard, NC. (Both cities are roughly 200 miles west of Eden.)
An empty brewing facility – with extensive canning and bottling capability – could be an alluring target for other large craft brewers who are thinking about expanding their operations to the East Coast.