Companies Are Closing Plants and Cutting Jobs Based on These Four Figures

Key takeaways:

• PepsiCo, Nestlé, and Campbell’s together announced five U.S. plant closures in the past two months. In some cases, they shared that customers stayed and the production moved to other plants in the network.
• Though these companies didn’t disclose how they determined which plants to close, their statements suggest it came down to delivered cost per case, changeover capacity, site volume, and necessary capital.
• If you score your plant(s) based on four key numbers, you’ll find out what to fix, and you’ll have the data to share when your network starts deciding where to move volume.

On October 19, PepsiCo Beverages U.S. announced it would immediately close its Knoxville, Tennessee plant. Employees will keep their pay and benefits through a notice period that ends January 1. The state WARN notice lists 112 affected workers and a closure date no later than January 1, 2027. 

PepsiCo’s local sales and delivery teams will keep serving Knoxville-area customers, but the product they buy will soon come from elsewhere in PepsiCo’s network.

Knoxville is the second PepsiCo bottling plant to go in about five weeks. In September, the company said it would end manufacturing at its Cheverly, Maryland, plant, affecting 143 jobs. A spokesperson said the company “must continue optimizing and modernizing our network to best serve customers and consumers.”

Across the industry, food producers announced 29,693 job cuts through September, up 76% from the same period in 2025. Meanwhile, output of food, beverage, and tobacco products fell 1.5% from September 2025 to September 2026. When output declines, company leadership starts to question which sites are essential and which it can shut down.

When a network consolidates, the volume transfers to higher-performing plants 

The following examples show how larger companies are making decisions about closures:

• Nestlé will close its Solon, Ohio, factory by the end of 2027, with production ending by the third quarter. Pouch production for its foodservice business will move to the Nestlé factory in Gaffney, South Carolina. The company cited shifting customer needs and volumes, and said, “We determined that building on capabilities already in place elsewhere in our network was the most sustainable path forward.”
• Campbell’s is closing two snacks plants, in Hyannis and Jeffersonville, and reduced its salaried workforce by about 13%. Both decisions are part of a program targeting $500 million in cost reductions by fiscal 2030. Snacks net sales fell 12% in the fourth quarter, or 6% on an organic basis, according to the company’s earnings release.
• PepsiCo reported North America beverage unit volume down 2% in the third quarter and said more “structural cost reduction actions” would follow in the coming months. On the earnings call, CEO Ramon Laguarta described reviewing costs on the basis that “everything that is not related to growth will not be part of the company,” and said network rationalization is already under way in beverages.

So Gaffney is picking up Nestlé’s pouch work, and other PepsiCo plants will supply Knoxville’s customers. A consolidation downsizes a network while adding volume to sites that have growth potential. Protecting your plant requires knowing and improving its performance, which also supports the case that your plant should be the one that grows.

Four figures that determine whether your plant stays open

While PepsiCo, Nestlé, and Campbell’s didn’t share specifics on why they closed certain plants, their strategic decisions suggest they considered delivered cost, flexibility, capability, and the capital it would take to maintain competitiveness. 

1. Delivered cost per case, including freight to the largest customers 

A plant can win on conversion cost and lose on the truck. Campbell’s told investors its fourth quarter carried “double-digit logistics inflation, driven by higher diesel costs and reduced driver availability.” When freight increases that fast, a slower plant that’s closer to the biggest customers has an advantage over a faster one several states away.

You should calculate this number by line and by major customer, rather than a site-wide average. Load in labor, materials, overhead, and outbound freight. 

2. Changeovers absorbed each week without overtime

PepsiCo tied Cheverly’s closure to changes in consumer demand and technology. On the earnings call, Laguarta said the company would invest more behind Pepsi, Mountain Dew, and other soft drink brands. Shifts like that affect what each line has to run and how often it has to switch. Therefore it’s easier to pass new work to a site with proven flexibility.

Count how many changeovers each line handles in a normal week on regular shifts, and how long each one takes. If you already need overtime to maintain the current schedule, decision-makers won’t believe it has room for the next SKU.

3. How much network volume only your site can run

Nestlé’ could only move Solon’s work because they had the capability at another plant.

List every SKU you make, and note for each whether another plant in the network could take it over without adding new equipment. The share only your plant can produce is your strongest protection, because moving it would cost the company.

4. The capital your site requires to stay competitive

A network review considers the spending each site needs over the next few years, including deferred maintenance, line upgrades, and food safety and compliance projects. Past investment doesn’t mean much, since the review calculates what it costs to keep the site competitive going forward.

Even capital that’s already been approved could be cut later. So when you price your projects, price them honestly and pair each with the cost reduction or volume it would bring.

Protect your plant with a thorough review

While you probably won’t have access to full network or sister plant data, you can compare your plant’s trends to what you know about the plants that could take your volume.

1. Start with cost per case. Find the last two quarters by line and by your top five customers, freight included. 
2. Count changeovers and the overtime behind them. Track a month of actual changeovers per line on regular time. Make a note of which ones forced a shift into overtime.
3. Compare your SKUs to the network’s. Determine which products are only made at your site, those also made at one other site, and those made at several. The first group is key.
4. Price your capital list. The list should cover the next three years, including maintenance you’ve been deferring. Make sure there’s a payback or volume gain attached to each project.
5. Plan a solution for the weakest area. Focus on one weak point that could potentially put your plant at risk of closure, and make a 90-day plan to turn it around.

If your plant builds cost per case in a spreadsheet once a quarter, that’s a good place to start. The inputs are already in your systems. Production counts are in your MES, labor hours are in timekeeping, materials and overhead are in your ERP, and freight is on carrier invoices.

AI tools that reconcile those sources can keep cost per case current by line and by customer. They can also flag key changes in a line’s cost. A good practice is to keep someone in finance accountable for the method so the number stays reliable.