Snyder’s-Lance is closing a chips plant in Perry, Florida, as part of an effort to streamline its business and increase efficiencies at the snack maker, according to the company.
The plant, which is expected to close by the end of September 2017, is part of a “multi-year transformation plan” for the company. Brian Driscoll, Snyder’s-Lance's president and CEO, said more information on these changes would be included in their second quarter financial report on August 8th.
“This has been a very difficult decision for our organization," Driscoll said in a statement. "However, this is a required first step to improve our financial performance, balancing costs and expected levels of profitability in a very competitive environment.”
The Florida plant closure is the first of many steps being taken to meet CEO Brian Driscoll’s goal of becoming a snacking powerhouse. The company, known for its Jay's chips and Archway cookies, is looking to expand regional distribution of some of it products nationally, focus more on millennials and potentially acquire more companies, according to BakingBusiness.com.
Driscoll sent a company-wide email last week announcing it would cut 250 jobs. This loss is roughly 4% of its 6,100 current employees.
This is a good time for Snyder’s-Lance to keep a sharp eye on what snack consumers want. Snacking is especially popular among millennials and members of Generation Z who are increasingly looking for healthier options. The challenge for Snyder’s-Lance is that it also must contend with other snack makers who are boosting their presence and competing for limited shelf space.
The company also has shareholders to answer to so it's not surprising Snyder’s-Lance is looking to increase efficiencies and save money when it can, even if some of that comes from job cuts. Earlier this year, Snyder’s-Lance started a review of its operations after Driscoll said first-quarter results fell “significantly behind our expectations.”
There has been speculation about which Snyder’s-Lance snacks and factories would get the axe. About 50% of the company’s 2,000 SKUs contribute only about 5% of total branded gross sales. It's likely that more brands and factories could be affected in the near future.
Snyder’s-Lance considered moving Cape Cod Potato Chips production from its namesake Massachusetts location to another facility. Ultimately, the snack-maker decided to keep the plant open, and even invest $20 million to update its manufacturing capabilities. The non-specific ‘snack chips’ made in Perry, Florida don’t bring up the same authenticity and nostalgia that a consumer feels when buying Cape Cod chips made right in Cape Cod. The public outcry over closing the plant in Perry will likely be marginal to what it would have faced if Snyder’s-Lance closed the Cape Cod facility.
Other Snyder’s-Lance brands to watch include Pop Secret and Emerald Nuts. The microwave popcorn brand has been unable to take advantage of the surge in popcorn consumption, possibly because many varieties don’t have the simple ingredients list found in top selling brands like SkinnyPop. Pop Secret also has struggled to maintain growth. In addition, Emerald Nuts could be a target for change because it’s 3% share pales in comparison to Kraft Heinz's Planters.