US food manufacturer Amy’s Kitchen is to shut a manufacturing facility in California.
Privately-owned Amy’s Kitchen leased the factory in San Jose last year to meet the rising demand for its pizza products, which had been boosted by changes in consumer habits during the pandemic.
However, the company said supply-chain disruption and “abrupt” cost increases mean the site is losing money.
“The tight labour market and inflation-driven near doubling of capital expenditure costs created missed distribution opportunities, while ongoing supply-chain woes exacerbated by the war in Ukraine increased raw materials and logistics costs by more than 100% in some categories,” Amy’s Kitchen said in a statement.
“As an example, Amy’s is experiencing a more than 125% increase to the price of sunflower oil used in many of their meals. While Amy’s Kitchen’s three other food processing facilities have been able to meet production and revenue goals, San Jose is losing $1m a month, which cannot be offset by the company’s other facilities.”
Just Food asked the family-owned business to clarify the impact on workers but the company declined to comment. Local reports say around 300 staff will lose their jobs. The business has factories in Oregon and Idaho, plus another in California.
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In May last year, co-founder Andy Berliner again became the group’s CEO after the soup and meals maker announced the departure of Xavier Unkovic after less than a year in the job.
Former Mars executive Unkovic, who joined the California-based company in 2017 as the firm’s president, replaced Berliner in the CEO role in 2020. Berliner, who set up Amy’s Kitchen with his wife Rachel, became executive chairman.