Dive Brief:
- Unilever will close its plant in Brampton, Ontario, and lay off 280 workers. The facility makes dry mixes for instant soups, gravies, and similar items for the Lipton and Knorr labels.
- Work on the dry mix products will be moved to an existing facility in Independence, MO, that makes salad dressing. The company will spend $99 million to upgrade the plant.
- The decision comes just days after Unilever announced a drop in revenue and a poor performance by its North American units.
Dive Insight:
Unilever needed to do something to turn around its numbers. And although the wisdom of this particular move is difficult to understand, we trust that the company has calculated carefully that the shift to Missouri will pay off in the long term ... and that the dry-mix business itself can be salvaged.
Regardless, its unfortunate that the company has chosen to cut operations in Ontario. That province, once a bastion of food production and distribution, has seen tremendous losses recently as Kellogg, Heinz, and Smucker's all shuttered factories there.