Friday, September 29th, 2023
Network optimization is in the works for Utz Brands, which recently revealed a host of initiatives set to reduce its operational costs and support the company’s long-term volume growth.
In its latest press release, the salty snack provider announced the implementation of various initiatives aimed at achieving the following goals:
- Simplify the supplier’s existing plant network and streamline its operating structure by consolidating volume into a smaller number of facilities, which is expected to lower costs and improve margins
- Strengthen the brand’s relationship with a key co-manufacturing partner that will support the optimization of its network
- Create incremental capacity in the company’s warehousing network to support future growth, drive efficiency, and strengthen customer service
- Monetize assets that are not strategic to Utz’s long-term footprint
These initiatives demonstrate the company’s ongoing dedication to optimizing its supply chain, the release noted. To reach each of these targets, Utz has revealed multiple key plans and growth moves, including:
- Divested the company’s manufacturing plant and all related assets in Bluffton, Indiana
- Announced that the company’s lowest-volume manufacturing plant in Hanover, Pennsylvania (the “Carlisle Street Plant”) will cease operations in the first quarter of 2024
- Signed a built-to-suit agreement for a new, approximately 650,000-square-foot leased distribution center located in Hanover, Pennsylvania, (the “Northeast Logistics Center”), expected to open in the first quarter of 2025
- Decided to list for sale its Louisiana manufacturing plant, which was impacted by Hurricane Ida in 2021 and has remained idle since sustaining irreparable damage, as well as its Alabama plant, which was closed in June 2023
Following these actions, Utz Brands will have 13 active plants, including the manufacturing facility in Kings Mountain, North Carolina, (the “Kings Mountain Plant”), purchased in April 2022. The sale and closures are expected to drive increased net sales averages at the company’s remaining plants.
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