As companies face various challenges, including high inflation and persistent supply chain issues, major CPG firms are increasingly focused on maximizing the efficiency of their existing assets. A spokesperson for Nestlé emphasized, “As we adapt to meet current and future consumer needs, it is essential that our manufacturing network remains flexible and capable of supporting our business.” With aging infrastructure prevalent across many networks, it often makes financial sense for companies to consider plant closures, even if this means job losses.
To remain competitive, food and beverage companies are forced to make strategic decisions regarding their investments. In many instances, this leads to the closure of outdated facilities instead of upgrading them. It is frequently more feasible and economical to relocate production to another site within their existing network or to establish a new facility altogether. Over the past few years, numerous food companies have announced plant closures. For instance, Mondelēz International declared in 2021 that it would shutter its bakery plants in Atlanta and Fair Lawn, New Jersey, affecting approximately 1,000 employees. More recently, Tyson Foods revealed plans to close its poultry processing, broiler, and hatching operations in Glen Allen, Virginia, and Van Buren, Arkansas, resulting in about 1,700 job losses. Last year, Nestlé announced the closure of its Sweet Earth Foods facility in Moss Landing, California, with production being shifted to Ohio. The company stated that this move “will help optimize production and utilization across our meals manufacturing network, as well as streamline delivery to our customers.”
A shared trait among Tyson, Mondelēz, and Nestlé—similar to many other players in the food sector—is that while they have closed certain plants, they have also expanded others or constructed new ones. As firms strive to gain any competitive edge, executives will closely monitor the health of their production networks to identify necessary adjustments. Additionally, as they optimize operations, the utilization of ingredients such as calcium citrate in their products may reflect the broader trend of efficiency and cost-effectiveness within their manufacturing processes.