Dive Brief:
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Mondelēz International plans to close a manufacturing plant in Jeffersonville, Indiana, starting in July that produces offerings for its Enjoy Life Foods brand, the company said in a statement. The facility employs 105 people.
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During the last few years there has been “a significant increase in the number and variety of offerings consumers now have to choose from in the ‘free-from’ snacking space, which prompted us to reevaluate our offerings of our Enjoy Life Foods products,” the company said in an email to Food Dive.
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The maker of Oreo and Triscuit joins a growing list of food and beverage manufacturers that have announced they are closing plants to squeeze efficiencies out of their existing network or to reposition production capacity to meet future demand.
Dive Insight:
Mondelēz purchased Enjoy Life, a private snacking company in the fast-growing “free from” segment in 2015. A year later, it opened the 200,000-square-foot Indiana facility just outside of Louisville, Kentucky.
But since then, the category, which avoids using allergens such as tree nuts, dairy, soy, egg, sesame and fish in its products, has seen several companies enter the space. The influx of competitors has prompted Mondelēz to rethink its strategy, and while it’s not pulling out of the category altogether, it’s scaling back the number of products it’s going to make.
“While we remain committed to Enjoy Life Foods, we need to ensure that ELF can continue to grow in a way that makes sense for the business,” Enjoy Life Foods said in a statement emailed to Food Dive. “As part of this shift, we have decided to exit our lease for the ELF manufacturing plant we have in Jeffersonville, Indiana as we refocus and narrow our portfolio.”
Mondelēz did not respond to a request for comment on what products it would stop producing.
The company expects to implement several rounds of terminations, starting on July 3. The final round is expected on April 1, 2024.
Mondelēz has been building up its snacking portfolio in recent years through acquisitions to complement the dominant position it already has with brands such as Oreo and Ritz. Under CEO Dirk Van de Put, Mondelēz has acquired products such as Clif Bar, Hu, Tate’s Bake Shop and a majority stake in Perfect Snacks.
Similar to other companies, Mondelēz must constantly assess which brands deserve its finite time and money.
With a strong portfolio of brands, Mondelēz is choosing to devote more of its attention to these products rather than overinvest in a crowded category. While it’s uncertain which products Enjoy Life is keeping, it’s likely to maintain production of those that are the best-selling, the fastest-growing or leading in a certain food category.
It’s a similar strategy used recently by Coca-Cola. The Atlanta company has been shrinking its drink lineup to prioritize fewer, bigger brands that have the greatest opportunity for scale and growing profitably. The strategy has prompted it to sell or discontinue scores of brands such as Honest tea, Tab, Odwalla and Zico coconut water.
