Rising inflation, increased interest rates, and changing consumer attitudes toward spending have led national food processing companies over the last two years to reevaluate their operations and shut down manufacturing plants to restructure their businesses and reduce expenses.
Tyson Foods in 2023 shut down eight poultry plants located in Arkansas, Florida, Indiana, Missouri, South Carolina, and Virginia.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
In a statement, the company said it was “reallocating resources to operate as efficiently as possible, while maintaining ample capacity to serve our customers.”
Related: Another national employment company files Chapter 11 bankruptcy
Also in 2023, Krispy Kreme closed a manufacturing facility in North Carolina, and Hershey closed its Dot’s Pretzels factory in North Dakota to cut costs.
Snack maker Utz closed a manufacturing plant in Pennsylvania and put other plants in Indiana, Louisiana, and Alabama up for sale as part of a network downsizing.
Del Monte Foods in April 2024 closed its Toppenish, Wash., and Markesan, Wis., fruit and vegetable canning plants to align and streamline operational capacity with consumer demand, the company said in a statement to TheStreet at the time.
Del Monte Foods closed several processing plants
The Toppenish plant had 127 employees, and the Markensan facility had 90 employees who were designated for layoffs.
Del Monte’s labelling and distribution activities continued at the plants until fall of 2024.
The fruit and vegetable processor and producer has been addressing shrinking consumer demand for several years. In 2018, the company closed its tomato processing plant in Plymouth, Ind., as well as other plants in North Carolina and California. In 2019, it closed plants in Illinois, Minnesota, Texas, and Wisconsin.
Shutterstock
Del Monte Foods files for bankruptcy seeking a sale
Economic challenges have been too much for Del Monte Foods as the company filed for Chapter 11 bankruptcy with a restructuring support agreement, seeking a sale of its assets.
Related: Popular vision care chain files for Chapter 11 bankruptcy
The debtor and 17 affiliates, which include S&W Fine Foods Inc. and Contadina Foods Inc., filed its petition in the U.S. Bankruptcy Court for the District of New Jersey on July 1, listing $1 billion to $10 billion in assets and liabilities.
More bankruptcy:
- Iconic auto repair chain franchise files Chapter 11 bankruptcy
- Popular beer brand closes down and files Chapter 7 bankruptcy
- Popular vodka and gin brand files for Chapter 11 bankruptcy
Certain of the company’s non-U.S. subsidiaries are not included in the Chapter 11 case and continue to operate as usual.Â
The debtor’s largest unsecured creditors include Seneca Foods, owed over $19.9 million; Transplace Texas LP, owed over $9 million; and Steuben Foods Inc., owed over $6.9 million.
Del Monte Food, one of the nation’s largest producers, distributors, and marketers of food products for nearly 140 years, revealed that it is seeking a value-maximizing sale process as part of a strategic balance-sheet restructuring.
The debtor entered into a restructuring support agreement with a group of its prepetition lenders to seek a going-concern sale of all of its assets.
The debtor is also seeking approval of up to $912.5 million in debtor-in-possession financing from its prepetition term loan lenders that will include $165 million in new money to support the company through its Chapter 11 process.
“This is a strategic step forward for Del Monte Foods,” Greg Longstreet, president and CEO of Del Monte Foods, said in a statement. “After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods.Â
“With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success,” Longstreet said.
Related: Largest fast-food chain’s franchisee files for Chapter 11 bankruptcy
