Hanover-based Utz Brands, a branded salty snacks manufacturer, and its affiliated entities recently announced network optimization initiatives designed to reduce costs and support long-term volume growth.
The initiatives demonstrate an ongoing effort to optimize the supply chain.
The initiatives are expected to monetize assets that are not strategic, create incremental capacity in the company’s warehousing network, strengthen the company’s relationship with a key co-manufacturing partner, and simplify the company’s existing plant network and streamline its operating structure by consolidating volume into a smaller number of facilities.
Utz has taken steps to achieve the initiatives. It has decided to sell its Louisiana and Alabama manufacturing plants, will cease operations at its lowest-volume manufacturing plant in Hanover in 2024, divested its Bluffton, Ind., manufacturing plant and all related assets, and signed a built-to-suit agreement for an approximately 650,000-square-foot leased distribution center in Hanover.
When these actions are completed, Utz will have 13 active plants. Net sales averages are expected to increase at the remaining plants.
The volume from these closed facilities is expected to be absorbed by the remaining plant network and should reduce fixed overhead and drive efficiencies in manufacturing conversion costs.
On Dec. 15, Utz will discuss the initiatives at its Investor Day in New York City.