Market Commentary and Intraday News
Campbell Soup closing 2 plants, cutting 700 jobs
265 days ago
By CANDICE CHOI and MICHELLE CHAPMAN
(AP:NEW YORK) Campbell Soup is closing two U.S. plants and cutting more than 700 jobs as it looks to trim costs amid declining canned soup consumption.
The world's largest soup maker said Thursday that it will close a plant in Sacramento, Calif., that has about 700 full-time workers. The plant, built in 1947, is the company's oldest in the U.S. and has the highest production costs in the company's system.
It is one of the company's four major soup plants in the U.S.
Campbell also plans to shutter one of its two spice plants in the country; that plant is in South Plainfield, N.J. and has 27 employees. Production will be shifted to the other plant in Milwaukee.
The announcement comes as Campbell looks to reinvent itself with dozens of new soup flavors and sauces intended to lure younger consumers. Many of the new products come in pouches designed to convey a fresher feel, rather than the iconic steel cans that built the company into a powerhouse.
A Campbell spokesman, Anthony Sanzio, said that those new soup pouches are not currently made at its soup plants but are co-manufactured with another party.
Campbell has been struggling to fix its soup business amid evolving consumer tastes. Over the past decade, overall canned soup consumption is down 13 percent, according to the research firm Euromonitor International, as fresh soups have become more widely available at supermarkets and restaurants. Campbell's share of the market has also declined to 53 percent, down from 67 percent a decade earlier amid rising competition.
Campbell Soup Co. currently has about 19,900 employees globally. The company said the California plant is expected to close by July 2013 and the New Jersey plant by March 2013.
The Camden, N.J.-based company expects the closings to result in about $115 million in pre-tax costs. Its actions will also require approximately $27 million in capital spending.
Annual savings are predicted to be about $30 million starting in fiscal 2016.
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