- The Dickson, Tennessee plant where Conagra manufactures sausage brand Odom's Tennessee Pride, is expected to close in the fall of 2021, Conagra told Food Dive in an email. The plant employs about 345 people, and all roles will be affected by the closure.
- The Dickson facility is currently the only one that makes Tennessee Pride breakfast sandwiches. When it closes, the products will be made at other facilities in the company's network, mainly at one in Jackson, Tennessee.
- "We made this decision following a thorough analysis of our overall facility footprint and the need to operate as efficiently and competitively as possible across the company," Conagra spokesperson Terah Fox said in an email.
Although consolidating operations and cutting costs through this plant closure could help Conagra, the release of the news about it was not a best case scenario. The closure of the plant, which has been in Dickson for about 31 years, took its employees and the city by surprise.
"The City of Dickson is shocked and disappointed to learn of Conagra’s decision to relocate its Dickson operation to another facility," Dickson's Mayor Don Weiss Jr. wrote in a Facebook post. "There has been no communication between the company and city about the decision, and the city learned of it along with the general public through the company's statement to the media."
Weiss said he was "saddened for the more than 300 employees who will have their lives disrupted and be forced to seek new employment."
The Dickson Tennessee Pride facility opened in 1989. In 2012, Conagra bought the Tennessee Pride brand, which makes frozen and refrigerated breakfast sandwiches and sausage. That year, Conagra closed Tennessee Pride's other facility in Little Rock, Arkansas and laid off 240 employees. Now the company is moving all operations to other existing facilities, which could help cut costs.
Since the facility has employed many residents of Dickson and surrounding areas, the city could take hit from this plant closure. However, the plant won't close until next year, so employees have some time to look for new work.
It makes sense that Conagra would want to consolidate after its recent portfolio-changing moves. In 2018, Conagra bought Pinnacle Foods for a whopping $10.9 billion. After that major acquisition, the company has been pausing on M&A while it evaluates its offices, brands and resources.
This isn't the first plant closure from the company in 2020. The company also announced earlier this month that it would shutter a 350-job facility in Newport, Tennessee, where Conagra has manufactured products including Hunt's ketchup and Van Camp's canned beans since 1995.
"These changes will allow us to optimize our expanded network, which grew upon our acquisition of Pinnacle Foods," the company told 10News.
Last year, Conagra also announced it would close the former Pinnacle Foods office in Boulder, Colorado and cut 100 employees. And this month, the company agreed to sell its Lender's Bagel business, further showing the company's focusing on closing plants and divesting segments that aren't as profitable.
In the past, Conagra has used layoffs as a cost-cutting measure. The company laid off 140 employees in 2017 — 16% of its workforce at a long-established factory in Milton, Pennsylvania. And back in 2015, Conagra moved from its Omaha, Nebraska headquarters, cutting 1,000 jobs there, and moving 300 workers to its then-new Chicago headquarters.
The decision to close this Tennessee facility could free up funds for more innovation. After all, Conagra is doing more than just cutting jobs and facilities. A few months ago, the company announced that it is expanding its current R&D facilities with a new 40,000 square-foot innovation space in Chicago. Earlier this month, the company announced it is expanding production at a Lee County, Iowa facility, investing nearly $32 million and adding about 91 jobs.
As Conagra works to consolidate after the Pinnacle deal and increase sales, more plant closures and layoffs could be in the future. Conagra's CEO Sean Connolly said on an earnings call in December the company is investing in the business and infrastructure so it can more efficiently support its brands. Since the Pinnacle acquisition closed and through the end of Conagra's second quarter, the company has reduced net debt by more than $800 million.