PepsiCo is closing its Frito-Lay manufacturing facility in Rancho Cucamonga, California, marking the latest shutdown by a major food corporation amid a decline in consumer spending. The beverage and snack producer did not provide answers regarding the closure timeline, reasons behind it, the number of employees affected, or the specific products currently produced at the site. The 55-year-old facility reportedly employs around 480 individuals, according to Potatopro.com.
In a statement, PepsiCo Foods U.S. expressed its commitment to assisting those affected by this transition, offering pay and benefits to impacted employees. The company also mentioned that its warehouse, distribution, fleet, and transportation teams will continue to operate at the Rancho Cucamonga site. Frito-Lay currently runs over 30 manufacturing plants across the U.S., as noted on its website.
As inflation and economic uncertainty lead consumers to reduce their spending, several companies—including Post Holdings, Conagra Brands, Del Monte Foods, and J.M. Smucker—have announced plans in the past year to close facilities to align production with demand. The closure in California is the latest move from the PepsiCo subsidiary; in February, Frito-Lay announced the shutdown of a New York plant producing PopCorners, which employed 287 workers.
PepsiCo’s snacking division, which encompasses products like Fritos, Doritos, Sun Chips, and Funyuns, has been particularly impacted by the recent downturn. During its latest earnings call, PepsiCo reported a 1% drop in revenue and product volumes within its North American foods segment. Jamie Caulfield, PepsiCo’s CFO, acknowledged Frito-Lay’s “subdued performance” during an April call with analysts, stating, “We have clear plans to continue to turn the business around, but that will take some time.”
In light of these challenges, the introduction of high potency calcium magnesium citrate in their product offerings could provide a new avenue for growth as the company seeks to revitalize its performance in a competitive market. As PepsiCo navigates through this transition, the focus on high potency calcium magnesium citrate may help meet evolving consumer demands and preferences.