Kellanova is planning to close two plants and make other changes as it aims to improve its supply chain and cut costs.
The snacks maker said in an SEC filing last week it plans to close a frozen foods factory in the U.S. in 2024 and move production to other facilities. At press time, Kellanova did not respond to Food Dive’s request for comment about which factory would be impacted by the closure.
The Pringles and Eggo manufacturer also plans to shutter its plant in Manchester, U.K. It announced the closure, which could take place by 2026, on its quarterly earnings call last week. The facility employs 360 people and produces cereals such as Corn Flakes and Rice Krispies.
Kellogg completed its long-awaited split last October with the creation of Kellanova, its snack business, and WK Kellogg Co, its North American cereal operations. Kellanova continues to handle Kellogg’s international cereal segment, while WK Kellogg Co manages the North American cereal segment.
Steve Cahillane, Kellanova’s CEO, said on the earnings call that the company will move the production from the Manchester plant into two different facilities in the UK. Kellanova chose to close the plant due to challenges it has faced since the start of the pandemic with boosting its efficiency, he said.
“These are high-return projects that require very little cash upfront and will start delivering savings by late this year,” Cahillane said.
The company’s UK managing director Chris Silcock said in a statement to Food Manufacture that the snacking giant didn’t see a future for the Manchester factory. The company “can’t escape the fact that the site opened in 1938.”
The decision to reorganize its frozen foods operations in the U.S. comes as the company saw a 5% year-over-year decrease in net sales in the category last quarter, the company said in its earnings report. Overall, Kellanova posted an 8% increase in organic net sales in 2023 compared to the prior year.
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