Campbell Soup Co. has announced that it will close a plant in Sacramento, Calif., that has about 700 full-time workers. Built in 1947, the plant, which makes soups, sauces, and beverages, is the oldest in Campbell’s U.S. network and has the highest production costs on a per-case basis. Campbell also plans to close a spice plant in South Plainfield, N.J., that has 27 employees. Production will be shifted to the company’s other spice plant in Milwaukee, Wis.
According to the company, a number of factors resulted in excess capacity in Campbell’s U.S. thermal manufacturing network, including productivity improvements, volume declines of U.S. canned soup, and an increased focus on new packaging formats which are often produced under co-manufacturing agreements.
“We recognize this is difficult news for employees in Sacramento and South Plainfield. Campbell is committed to helping them work through this transition. As we position Campbell for profitable growth, we must continue to optimize our U.S. plant network and diversify our manufacturing capabilities. We expect the steps we’re announcing today to improve our competitiveness and performance by increasing our asset utilization, lowering our total delivered costs and enhancing the flexibility of our manufacturing network. These actions also will eliminate the capital investments needed to maintain the Sacramento plant,” said Mark Alexander, President, Campbell North America.