US-based salty snacks manufacturer Utz Brands is overhauling its manufacturing network to “support long-term volume growth and reduce costs”.
The Boulder Canyon maker has sold a plant in Indiana and has put two others – one in Louisiana and one in Alabama – on the block.
The company is also closing a facility in Hanover in Pennsylvania and has signed a lease agreement for a new distribution site in Hanover.
Utz Brands said the moves would “simplify” its footprint. Fewer facilities, it explained, would mean lower costs and improved margins.
“These actions are expected to create a more efficient and flexible network to support the company’s growth and better serve its customers,” Utz Brands said in a statement.
The buyer of the plant in Bluffton in Indiana, which makes TGIF-branded products, is Super-Pufft Snacks USA, a co-manufacturer for the company. Terms were not disclosed.
Utz Brands' site in Louisiana suffered "irreparable damage" during Hurricane Ida in 2021 and has been idle since. The company closed its Alabama plant in June.
The plant in Hanover Utz Brands is closing on Carlisle Street and is the company's headquarters. Utz Brands said it would cease operations at the site in the first quarter of next year. No job losses are expected from the move, the group added.
Employees of the Hanover facility will "move to other positions in the company - there will be no job losses with this action," told an Utz spokesperson to Just Food. "As it pertains to our Bluffton plant, all associates have been offered positions with Super-Pufft."
Utz Brands will use the Kings Mountain plant it bought last year to absorb the volume produced by the Carlisle Street site.
The new, 650,000-square-foot leased distribution centre in Hanover is expected to open in the first quarter of 2025.
After all these moves, Utz Brands will have 13 active plants.
“The sale and closures are expected to drive increased net sales averages in its remaining plants. The volume from these closed facilities is expected to be absorbed by the remaining plant network and should reduce fixed overhead and drive efficiencies in manufacturing conversion costs,” Utz Brands added.
Under the terms of the deal with Super-Pufft, Utz Brands said it had agreed a "newly established co-manufacturing relationship" under which the co-packer will manufacture certain TGIF products "under favourable terms".
Utz Brands added: "Over time, the company expects to shift production of these products into Utz-owned and operated manufacturing facilities."
In August, the company said it was poised for a gross margin recovery in the second half.
The manufacturer, which installed Howard Friedman as its new CEO in December, saw its net profit turn negative in the second quarter, translating to a year-to-date loss of $23m.
