Campbell shutters inefficient US soup site to optimize for “supply chain of the future”

30 May 2024 --- Campbell Soup Company will shut down its “aging” organic soup, broth and plant-based beverage facility in Tualatin, Oregon in the US. It will also reduce its Jeffersonville, Indiana site size to focus on Late July tortilla chips and regional snack brands.

This comes as the company simultaneously plans to inject US$230 million in network-wide projects and eyes a “competitive advantage” by transforming its supply chain. Steps in this stride include closing inefficient sites and shifting production to more modern and effective plants.

“To fuel growth and transform our manufacturing and distribution network, we must invest and further strengthen our supply chain,” says Dan Poland, chief supply chain officer at Campbell.

“By leveraging our best-in-class in-house capabilities combined with the expertise of trusted manufacturing partners, we will continue to make the highest quality products with a more agile, flexible and cost-effective manufacturing network.”

Shift in operations
Campbell acquired the Oregon plant in 2017 as part of its purchase of Pacific Foods. The site houses several leased buildings of approximately 250,000 square feet. 

“The aging facility and inefficient nature of the site’s configuration can no longer support the increased consumer demand and continued growth of the business,” says the company.

The business will shift the plant’s soup and broth production to other thermal and aseptic plants in its network, while the plant-based beverage production segment will go to Campbell’s co-manufacturing partners.

Meanwhile, the Indiana plant will focus on Late July tortilla chips production, while the kettle potato chips manufacturing will be moved to Campbell’s Charlotte and Hanover plants.

Job losses
The change of operations at the Indiana plant will take effect in July and impact approximately 85 of the 230 employees at Jeffersonville. 

Campbell will inject US$8 million in its Franklin, Wisconsin plant to ramp up tortilla chip production.The Oregon site will cease its activities in phases, expected to finish by July 2026. The first phase will impact 120 of its 330 employees in August 2024, notifies Campbell.

The company said impacted employees will receive “separation benefits” and job placement support.

Cash injection to propel growth
Campbell is investing funds worth US$230 million through fiscal 2026 at newer, more agile facilities in its network and has shelled out approximately US$80 million till date to enable the “supply chain network of the future” and unlock business growth.

These projects will generate nearly 210 new roles across the organization and will include new training and development programs for employees, underscores the soup business. 

The projects will be set up in Maxton, North Carolina and will receive a US$150 million investment for new aseptic soup production. Hanover, Pennsylvania, will receive US$72 million worth of funds to add additional potato chip kettles.

Meanwhile, a US$8 million investment in Franklin, Wisconsin will ramp up the capacity for tortilla chips.

In addition to these investments, the company previously announced plans to expand production of Goldfish crackers at its Richmond, Utah plant. The new line will increase the bakery’s output of Goldfish by 50%.

Campbell also diversified its meals and beverages portfolio earlier this year by acquiring Sovos Brands in a US$2.7 billion deal.

By Insha Naureen