Kellogg to close US Town House and Kashi cracker factory

The site in Seelyville, Indiana – which produces crackers for the Town House and Kashi brands - is to be shut down in phases starting next February, and is expected to close completely by September.

Kellogg said 150 jobs will be affected by the move.

The company said it has a “compelling business need​” to better align its manufacturing assets with marketplace trends and customer requirements.

“To that end, we continue to evaluate our global manufacturing network to ensure we have the right manufacturing capacity – in the right locations – to better meet our current and future production needs, and the evolving needs of our customers​,” added Kellogg.

“As part of that process, we assessed our US cracker manufacturing network and determined that we have more capacity than is required to meet demand​.”

The announcement comes two months after Kellogg’s admitted a shake-up of its snacks direct store delivery system had impacted sales in the first quarter of the year.

Sales force shake-up

A key reason for a 2.6% year-on-year drop is first-quarter sales from Kellogg’s US Snacks segment was reorganizing the snacks sales force to more clearly define the roles of sales, merchandising and support, said the business in May.

While crackers were one area of the snacks business particularly impacted by the disruption, Kellogg said crackers were generally performing well, with Cheez-It, Townhouse and Club brands all posting strong sales.

Kellogg’s overall reported net sales in Q1 were down 4.5% year on year to $3.4bn, which the company said was primarily due to currency translation resulting from the remeasurement of the Venezuelan business in mid-2015.

The business is due to report its second quarter results tomorrow (August 4).