October 13, 2005

Pepsi-Cola Marks End of An Era As Bottling Line Closes

Thursday marked the end of an era as the Pepsi-Cola Memphis Bottling Company officially closed its bottling line after more than 70 years in service. The move completed the transition for the local company to strictly a distribution center for northeast Missouri and southeast Iowa.

The writing had been on the wall for several years as the bottling line saw declining production due to changes in the industry.

We were bottling such a small percentage of what we sell annually, said company president Mike Johnson. That combined with the maintenance costs on the aging machinery made this a fairly simple matter of economics. For the past several years our competitor had a dramatic cost advantage over us with high speed lines and near capacity volume.

In June the company discontinued its 10-ounce glass returnable bottle line, leaving just 20-ounce and 2-liter plastic bottles as the two items filled at the plant. The company only filled Pepsi, Diet Pepsi, Mountain Dew and Diet Mountain Dew in these two sizes.

To my knowledge we were the last bottler standing as far as glass returnables were considered, Johnson said.

The line closure follows the industry trend that saw similar facilities close in Oskaloosa, IA, Brookfield and New Haven 15 years or more ago. The business has transitioned to much larger production companies that in turn supply the various regional distributors.

To be honest, I dont know of a smaller bottling facility than what we had, Johnson stated. There may be one out there, but Im sure they are faced with the same economic factors that ultimately led us to this decision.

He noted that the facility in Marion, IL was one of the smaller bottlers that he was aware of, and it is at least 20-times larger than the Memphis plant. Generally the industry is transitioning to corporate bottlers, with just one or two large producers per state.

The rising cost of equipment had limited the company in the number of products the plant could handle. The growth of the industry added to the problem with the ever-changing bottle sizes and a growing number of varieties of soda.

Concerns about the longevity of the machinery also led to the decision to close the line. Johnson stated the current bottling line was purchased in 1985. In 20 years the technology has changed dramatically from the existing stainless-steel conveyer system to the modern air-jet driven machines for the lighter plastic bottles.

I use the analogy of an old car, with the line being like your old Ford, Johnson said. It was at the point when you get in it every morning you dont know whether or not it is going to start, and how much its going to cost to fix the next problem.

While the move was obvious as far as economics, it was still a difficult choice for the company as a total of six employees were laid off in the process. Other workers on the bottling line were transitioned into other positions.

The company offered a severance package for the years of service from each employee and also pledged to provide assistance in an effort to find other employment opportunities.

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