Hershey is set to shut down a US facility that produces Dot’s Homestyle Pretzels.

The US confectionery major announced its factory in Velva in North Dakota will no longer be operational as the company aims to improve efficiency for its pretzel brand.

“Due to the physical limitations of the building and cost associated with the Velva facility, it has led us to the hard decision to cease operations and close the facility,” a Hershey spokesperson said.

The spokesperson told Just Drinks there are 27 employees at the site. Hourly staff are being offered the option of relocating to certain other plants within the Hershey manufacturing network. Those electing not to relocate will be offered a severance package.

The pretzel company was acquired by Hershey in 2021 alongside Pretzels Inc. in a deal worth $1.2bn. Dot’s Homestyle Pretzels was set up in 2011 in North Dakota by founder Dot Henke.

The Hershey and Reese’s chocolate owner made its first significant move into savoury snacks in 2017 when it bought US business Amplify Snack Brands for $1.6bn. Among Amplify’s assets was UK crisps business Tyrrells, which Hershey sold in 2018 to Germany’s Intersnack.

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In the second quarter of 2023, net sales from Hershey’s North America salty snacks business unit were $272.4m, an increase of 6.3% versus the same period last year driven by price realisation.

Dot’s Homestyle Pretzels retail sales increased 23.6% during the three-month period.

Last week, Hershey announced it had agreed a deal to acquire a facility in Canada it sold in 2007.

The Reese’s maker is to buy the Hershey Drive site in Ontario from cannabis company Canopy Growth.