Dive Brief:
- Smithfield Foods will close a Massachusetts dry sausage plant and lay off 190 workers in a move to optimize production, according to a WARN notice filed with the state.
- The Springfield plant will close in August, a company spokesperson told Food Dive. Production will be transferred to other Smithfield facilities with “the capacity to make these products to our same high standards of quality.”
- Smithfield recently expanded production capacity for dry sausage with the 2024 purchase of a Cargill plant in Nashville, Tennessee, which can make 50 million pounds of pepperoni and charcuterie meat per year.
Dive Insight:
Social media trends around charcuterie boards have pushed up sales of salami, pepperoni and other meats used to create artful and visually appealing snack spreads. While the trend has faded since its peak, Smithfield CFO Mark Hall said during the Nasdaq Investor Conference in December that dry sausage is still set to grow upwards of 6% through 2030.
Despite growth in the segment, Smithfield is consolidating its manufacturing network to offset inflation and trim costs. Purchasing the Cargill plant allowed the company to add production capacity without building a new facility or taking on costs associated with acquiring a new brand, Hall said.
Smithfield has slashed costs elsewhere, including selling off more than one-third of its hogs to reduce exposure to volatile agricultural markets. The cuts come as the company simultaneously invests to grow its position in packaged meats, including through the recent $450 million acquisition of Nathan’s Famous.
The strategy allowed Smithfield to deliver record operating profit in the third quarter. Sales for its packaged meat segment grew 9% to $2.1 billion.
