Coca-Cola closing pair of bottling plants affecting nearly 500 workers
Dive Brief:
- Coca-Cola plans to shutter a bottling facility in American Canyon, California, that employs 160 people and another plant in Northampton, Massachusetts, that has 320 workers, a company spokesperson said in an email. Both closures are expected to occur in 2023.
- The spokesperson said the closures are part of Coca-Cola’s “asset right” strategy to ensure it has the proper level of resources as it transforms its beverage portfolio to meet changing consumer and customer needs.
- The Atlanta-based soda, tea, water and sports drink maker has announced plans to cut thousands of jobs, and ceased production or sold several well-known brands during the past year in an effort to focus on beverages that are growing and have the potential to achieve a large scale.
Dive Insight:
Even before the pandemic, Coca-Cola was pruning some of its brands and repositioning the company for the future, but COVID-19 prompted the beverage giant to press the accelerator on its restructuring efforts. This round of plant closures is the latest step in that ongoing effort.
“What it means to be a total beverage company is always going to evolve because people’s tastes and needs will continue to evolve,” James Quincey, Coca-Cola’s CEO, told Food Dive in 2019. “Five to 10 years from now, many brands may be different or might not exist. New ones will take their place. This journey doesn’t end.”
The past year has been a busy one for the beverage giant, which has ended production of a number of big-named brands. It announced it would discontinue production of Tab soda and Odwalla juice as part of a wider plan to eliminate an estimated 200 brands globally. In January, Coca-Cola announced it was selling Zico, the distant No. 2 brand in the coconut water space behind Vita Coco, back to its founder. It recently announced it would end production of Coca-Cola Energy in North America after just over a year on the market.
Perhaps its biggest move came in December when Coca-Cola announced it was cutting 2,200 jobs globally through buyouts and layoffs. This followed two rounds of layoffs in 2015 of at least 1,600 white-collar jobs globally, and in 2017 of 1,200 positions, according to The Wall Street Journal.
With the closures of the California and Massachusetts plants in two years, the Coca-Cola spokesperson said the company “did not make this decision lightly.” Workers are encouraged to apply for jobs within the Coca-Cola system and at other third-party manufacturer locations. Coca-Cola announced last week a deal with Dutch company Refresco, which will take over some bottling operations, as part of a broader push by the maker of Sprite, Diet Coke and Fanta to focus more on its brands and less on producing them.
It’s likely many people will lose their jobs when these plants shutter in 2023. This latest restructuring is much deeper than prior efforts, but should put Coca-Cola’s operations on firmer ground as consumer tastes evolve and businesses it serves rebound from the coronavirus. As habits change both in terms of which beverages people consume and where they drink them, it is imperative that the global giant is able to respond quickly.
Still, Coca-Cola and its decision to cut jobs stands in sharp contrast to other companies — including many in the food and beverage space — that are struggling to find enough employees amid a broader labor shortage across the U.S. economy.