USA – Swiss multinational food and drink conglomerate corporation, Nestlé, is set to close two Health Science facilities in the US as it continues to consider options” for its instant coffee plant in Northern New Jersey.
In a statutory employment notice, Nestlé Health Science, the Group’s division that focuses on health and medical nutrition, stated that it “is in the process of consolidating its supply chain network to increase efficiency.”
Chris Richardson, Nestlé Health Science director of project management and HR special projects, stated in the WARN notice that “312 positions will be eliminated permanently” at the two plants, located in the west of Pittsburgh, in Robinson and Findlay townships.
“There are no bumping rights at the impacted facility. The employees have no elected collective bargaining representative,” he noted, adding that the jobs are set to be cut from the end of June.
In the Swiss company’s latest results for the three months until 31 March, Health Science marked organic growth of 2.8%.
In the release of the results, Nestlé said: “Growth in Nestlé Health Science was driven by pricing, e-commerce momentum, and geographic expansion. The business continued to gain market share.”
It also highlighted that the Health Science division held a stake worth US$700m in Prometheus Biosciences, which has been acquired by Merck for US$10.8bn.
For its instant coffee plant in Northern New Jersey, which employs about 227 people, the company’s spokesperson said: “The factory is limited based on its age, flexibility, and ability to meet growing consumer demand cost-effectively.”
“As Nestlé evolves to meet consumer needs now and, in the future, we must ensure our manufacturing network is dynamic and set up to support our business,” the spokesperson noted.
As companies like Nestle deal with aging infrastructure across their networks, it makes fiscal sense for many to consider closing the aging plant even if it results in the loss of jobs rather than retrofitting them.
Automation and other forms of technology are constantly improving and to stay competitive, food and beverage companies are faced with big decisions on how to best spend their money and remain productive.
Last year, Nestlé said it was closing its Sweet Earth Foods facility in Moss Landing, California, with production moving to Ohio. The move, the company said, “will help optimize production and utilization across our meals manufacturing network, as well as streamline delivery to our customers.”