- Kraft Heinz announced July 31 as the official planned closure date for its plant in Lehigh Valley, PA. Production of Grey Poupon mustard, A-1 steak sauce, and Keurig coffee will be moved to other Kraft Heinz facilities in the U.S. and Canada.
- The total job loss count will impact 341 workers.
- Lehigh Valley is one of seven plants Kraft Heinz announced in November that it would be closing by the end of 2017, affecting about 2,600 jobs.
Kraft Heinz will continue rolling out specifics about the plant closures. As the merged company continues to combine its portfolio and identify synergies and overlaps, the next announcements may concern which brands the company plans to divest, if any. Depending on which brands those are and what plants manufacture them, those decisions could lead to more factory closures and job cuts.
Kraft Heinz jumped in rank on the latest Fortune 500 list to No. 153, more than 100 spots from Heinz's No. 272 rank last year. The merger plucked Heinz's portfolio out of the lower half of the Fortune 500 companies and almost into the top 150. For Kraft's portfolio, however, the move was more subtle, as Kraft was ranked No. 165 last year.
This has huge implications for the U.S. sales of Heinz's portion of the portfolio, which generated 60% of its sales overseas prior to the merger. Kraft was already a primarily domestic manufacturer, but those brands can capitalize on Heinz's relationships and resources to expand overseas, while Heinz does the same to expand sales in the U.S. A higher Fortune 500 rank, thanks largely to its merger with Kraft, will lend Heinz more U.S. credibility.
Kraft Heinz isn't focused solely on cost-cutting, even at this point in the merger. Last month, the company announced two plant expansions: One $100 million investment in its New Ulm, MN, plant will expand production of cheese for Kraft Deli Deluxe slices, Velveeta retail sales, and other products, such as Handi Snacks. Another $17 million investment will expand the Grey Poupon plant in Holland, MI, which is one of the plants picking up the production lost by the Lehigh Valley plant.