Conagra Brands set to close its pie filling plant
In a statement, Conagra reiterated that the decision to close the Fennville facility was made to enhance operational efficiency.
USA – Conagra Brands, Inc. has announced plans to close its pie-filling facility in Fennville, Michigan, by the end of June, impacting approximately 85 employees.
According to Daniel Hare, a spokesman for Conagra, this decision is driven by the need to operate the company’s overall operations and facility footprint more effectively and efficiently.
The Fennville facility, one of Conagra’s oldest plants, specializes in producing pie fillings. Production is set to shift to a different plant within the Conagra system.
Katie Beemer, Fennville’s city administrator, said that the facility originally began as the Michigan Fruit Canners a century ago.
She indicated that the city plans to support the affected employees and will work closely with Conagra Brands on a transition plan for the facility.
Conagra also closed a facility in Wisconsin in 2024 that produced its Birds Eye frozen brand. As a significant player in the consumer packaged goods (CPG) sector, Conagra is among the latest companies to announce plant closures as businesses strive for increased efficiency in their production networks and to align supply with demand.
In response to inflation and efforts to boost profit margins, various food and beverage manufacturers have been closing production facilities. Other companies, including Tyson Foods, Del Monte Foods, The Campbell Soup Company, and PepsiCo, have also announced similar closures in the past year.
In conjunction with these operational changes, Conagra has revised its full-year sales forecast due to supply chain disruptions affecting two product categories.
Last month, the company projected a decline of approximately 2% in organic net sales, adjusting its previous guidance from a potential decline of 1.5% at worst to flat at best.
Conagra has also lowered its outlook for adjusted earnings per share (EPS) to US$2.35, down from the earlier forecast of US$2.45 to US$2.50.
The adjusted operating margin forecast has been reduced from 14.8% to about 14.4%. Unfavorable foreign exchange rates are expected to further impact earnings.
During the announcement of the second-quarter results in December, Conagra Brands President and CEO Sean Connolly noted that the company is facing a continued challenging consumer environment. For the three months ending November 24, net sales decreased by 0.4%, totaling US$3.2B.
In that quarter, gross profit remained stable at US$847M, while adjusted gross profit fell by 2.3% to US$842M. This decline was attributed to the negative impacts of inflation in the cost of goods sold and unfavorable operating leverage, despite productivity gains and higher organic net sales.
Diluted EPS came in at US$0.59, reflecting a 1.7% year-on-year decrease, while adjusted EPS stood at US$0.70, down 1.4% from the prior year.
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