Nestle has confirmed it plans to reduce US frozen ready meals production and consolidate output “closer to the customer” as it looks to strip costs out of the business.
The company revealed that its Jonesboro facility, which produces Stouffer’s and Lean Cuisine prepared meals, will cut production from six to four days a week. The move will result in the loss of 70 full-time positions, effective 11 February.
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Nestle factory manager Dan Brasell said that the decision reflected the “economic challenges” impacting the US food industry.
“Increased prices for ingredients– including meat, dairy and grains–continue to affect our business,” Brasell observed.
A spokesperson for Nestle told just-food that the initiative was part of Nestle’s drive to “wisely manage the cost of operations during challenging times”.
The spokesperson confirmed that overall production levels of Stouffer’s and Lean Cuisine will not drop, as production will be moved to the firm’s other manufacturing sites. “Jonesboro is one of four facilities, located in four distinct regions of the US. Our facility in Solon, Ohio serves the northeastern part of the US. Another in Gaffney, South Carolina serves the South East; Jonesboro, Arkansas serves the mid-South and Springville, Utah serves the West. As you can tell, we’re balancing the production amongst the four, basing those decisions on total delivered cost.”
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By GlobalDataNestle has looked to improve its competitive position in the US by simplifying its organisational structure, standardising pay rules and introducing “more technology and standardised processes” throughout manufacturing base, the company said.
