Mondelez International is to shut two biscuit-making plants in the US, with the snacks giant arguing it has to “focus on sites that are best positioned to meet our future needs”.
In November, the Oreo maker said it was considering closing the two factories, located in Atlanta in Georgia and in Fair Lawn in New Jersey. Mondelez yesterday (4 February) announced the plants would shut later this year.
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Mondelez said both factories “are no longer strategic assets from a geographic footprint perspective”. The company insisted the sites “face significant operational challenges, including ageing infrastructure and outdated production capabilities, which would have required significant investment to bring them to the modernised state required for the future”. There are around 600 staff positions at the Fair Lawn plant and approximately 400 at the Atlanta factory, a spokesperson said. Workers will meet Mondelez executives to “discuss opportunities i.e. opportunities within our organisation and/or severance/transition support, etc”, the spokesperson added.
Glen Walter, the president of Mondelez’s operations in North America, added: “This was not an easy decision to make, but as we continue to strengthen our leadership in snacking and address changing consumer behaviours, we must focus on sites that are best positioned to meet our future needs. We understand the impact this will have on our colleagues at these bakeries, many of whom have been with our company for many years, and we will dedicate ourselves to working with the unions and our employees to ensure that they will be cared for and supported through this transition.”
The sites' production will switch to other Mondelez factories has in the US or to its co-packers in the country. One move will see some Oreo output move to Mondelez's plant in Richmond in Virginia.
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During 2020, Mondelez reported "elevated consumption" in its biscuit category as food consumption moved away from foodservice to grocery retail amid the Covid-19 pandemic. Overall, Mondelez's worldwide biscuit sales grew 9%, with the company describing North America as a "big growth driver".
In the UK this week, Mondelez announced it was adding to the chocolate production done at its facility in Bournville in central England. The total production volume in Europe is not being increased, with Mondelez moving output from plants elsewhere in the region to Bournville, which is in the city of Birmingham. Some Cadbury Dairy Milk products will continue to be made at other plants in Europe "for technical and capacity reasons", Mondelez said.
