Dive Brief:
- Kellogg recently reported that if it doesn't reach an agreement on a memorandum with the Bakery, Confectionery, Tobacco and Grain Millers (BCTGM) Union, the company will shut down a cereal plant in the U.S.
- As demand declines, Kellogg finds itself hitting a higher production capacity than is needed, prompting negotiations with the union and U.S. plants. Workers vehemently denied the deal due to changes in wages and employee healthcare benefits.
- The company says that it needs to ensure that it is "operating the right number of plants in the right locations to better meet our current and future production needs, and the evolving needs of our retail customers."
Dive Insight:
This is not the first time Kellogg would be shutting down one of its plants, as it also closed or is planning to close plants in Georgia, Ontario, and most recently, Charmhaven. And it likely won't be the last as cereal sales drop and the company has had its own issues in 2014 with drops in net income and profits. Interestingly, Kellogg has also been pushing global expansion at the same time, including acquiring a majority stake in Egyptian packaged biscuits company Bisco Misr and eyeing Kenya for future projects.