Mexico-headquartered breads and snacks major Grupo Bimbo is planning to shut two US baked goods sites in New York state.
Two separate facilities belonging to the company’s subsidiary, Bimbo Bakeries USA, are due to shut their doors as a result of “reduced capacity in the manufacturing network”, according to a WARN notice.
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A total of 131 workers across two plants in Auburn and Olean, New York, are affected by the decision, the Worker Adjustment and Retraining Notification said.
Closure of the Auburn site is expected to take place on 6 September, while the Olean facility will shut on 2 November.
Just Food has asked Grupo Bimbo to confirm how the closure impacts production of its bakery brands in the US, which include Sara Lee breads, Lender’s bagels and Little Bites cakes.
Bimbo closed another one of its US bakeries in Bellevue, Nebraska, earlier in May. The plant employed 172 people.
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By GlobalDataThe decision at the time came following “recent assessment” of the site, which “concluded that this bakery is inconducive to our company growth plans”, Bimbo Bakeries USA said in a statement.
Marco Espinoza, senior director of regional operations, was quoted as having said in the statement that “it was apparent that the facility did not have the infrastructure and manufacturing capability to compete in the marketplace”.
Production at Nebraska was expected to be migrated to other bakeries in the group’s manufacturing network.
The company saw its performance dip significantly in the second quarter, results released on Wednesday (24 July) showed.
In the three months ended 30 June, Bimbo saw its North American net sales drop 6.6% on 2023 and 3.4% excluding the foreign exchange impact, to 45.3bn pesos ($2.3bn).
The Pom bread owner’s total net sales for the period were down 1.9%, and up 0.5% excluding FX effects, at 98bn pesos.
Its gross profits in North America dropped 4.6% and 1.6% excluding FX effects to 24.2bn pesos, while the gross margin was up 1.1 percentage point at 53.4%.
In a statement accompanying the results, the group associated the North American slump with “an industry-wide challenging consumption environment” in the US, “and strategic exits of some non-branded businesses”.
Bimbo’s total gross profits for the group were up 0.4% and 2.7% without FX consideration, to 51.3bn pesos, while total gross margins were up 1.2 percentage point year on year at 52.3%.
The company’s North American market made up 46.7% of its revenues in the 12 months ended 30 June.
