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Utz Brands, a player in the US snack food industry, has announced plans to close its manufacturing facility in Grand Rapids, Michigan, by early 2026.

This decision is part of the company’s broader strategy to streamline operations and enhance supply chain efficiency, reducing its manufacturing footprint from eight plants to seven.

In a statement accompanying the second-quarter earnings report, CEO Howard Friedman noted that the closure is driven by a commitment to operational excellence and long-term transformation. “While these types of decisions are never easy, they are necessary steps to streamline our operations and strengthen our supply chain for the long-term,” he said.

The company expressed gratitude for the contributions of its Grand Rapids workforce and pledged to support affected employees through transition assistance, including job fairs and severance packages.

This move follows Utz’s supply chain transformation plan, which aims to generate approximately 6% productivity savings as a percentage of adjusted cost of goods sold for fiscal year 2025.

The consolidation is expected to allow the company to allocate more production volume to larger, more efficient facilities, thereby enhancing automation capabilities and driving fixed cost leverage.

In its latest earnings report, Utz reported a 2.9% increase in net sales, reaching $366.7 million, compared to $356.2 million in the same quarter last year. Organic net sales also rose by 2.9%, primarily due to a favourable volume/mix contribution. However, the company noted a slight decline in net price realisation, which negatively impacted overall sales figures.

The firm’s branded salty snacks segment, which accounts for 88% of total net sales, experienced a robust 5.4% organic sales growth, bolstered by its key labels, including Utz, On The Border, Zapp’s and Boulder Canyon. Conversely, non-branded and non-salty snacks saw an 11.8% organic sales decline, attributed to challenges with partner brands and dips.

Looking ahead, Friedman expressed optimism regarding the company’s performance during the summer months, citing a strong alignment with seasonal demand for snacks. He reiterated that the strategic consolidation and cost-saving initiatives would provide the flexibility needed to invest in brand growth and expand profit margins.