PepsiCo is to permanently close a Quaker Oats factory in the US, local government officials have said.
In a statement shared on Facebook, the local government authority in the city of Danville in Illinois said the factory had already ceased production. PepsiCo is to continue to pay its employees until 8 June, the statement read.
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According to the city’s mayor, Ricky Williams Jr., the site will close on that date.
The closure of the factory comes after PepsiCo had to pause output at the facility last December due to the possible contamination of products with salmonella. The scare led PepsiCo to recall certain granola products.
The company reportedly confirmed the closure yesterday (3 April).
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“After a detailed review, we determined that meeting our future manufacturing needs would require an extended closure for enhancements and modernisation,” PepsiCo said in a statement published by local news organisation WCIA.
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By GlobalData“In order to continue the timely delivery of Quaker products trusted by consumers since 1877, we determined production would need to permanently shift to other facilities.
“We do not make this decision lightly and recognise the impact it will have on our employees, their families, and the Danville community. We have notified our workforce and are working closely with our employees and local community officials to provide a supportive transition.”
Just Food has approached PepsiCo for comment.
Quaker Foods North America saw its sales volumes fall 5% on an organic basis in 2023, according to PepsiCo’s financial results of the year. The division’s net revenue dropped 2% to $3.1bn. Operating profit declined 19% due to the lower sales, pressure on costs and the impact of the recall.
