The Huge Move Amy's Kitchen Just Made With Its California Factory
Although demand for Amy's Kitchen's ready-made organic foods soared during the early days of the pandemic, the company has had a lot of bad press surrounding them lately (via Eater). President and CEO of Amy's Kitchen Xavier Unkovic told Food Navigator that in March and April 2020, sales of select products grew between 50% and 70%. To keep up with this growth, the company announced the opening of a new facility in San Jose, CA in early 2021. Since then, the company has experienced a few growing pains due to issues with the supply chain (via Food Dive).
Not only is the organic brand experiencing logistical issues, but there have been reports of poor working conditions. Former Amy's Kitchen employees told NBC News that the fast pace of working the line at the factory has resulted in "repetitive stress injuries." As a result of these reports, a few grocery stores and citizens have been boycotting Amy's Kitchen until the workers' grievances are addressed (via SFist). The combination of the reports from workers and production issues has caused Amy's Kitchen to make a big move with its California factory, but not in a good way.
Amy's Kitchen closed its San Jose Factory this week
When Amy's Kitchen opened its new San Jose facility in March 2021 to focus on pizza production, the company did not predict that customers' preferences and the supply chain would change so drastically in about a year (via Just Food). "The tight labour market and inflation-driven near doubling of capital expenditure costs created missed distribution opportunities, while ongoing supply-chain woes exacerbated by the war in Ukraine increased raw materials and logistics costs by more than 100% in some categories," the brand said in a statement.
The company explained further that despite these challenges, other facilities have been able to meet quotas, but the San Jose facility has been hemorrhaging money to the tune of $1 million per month. While closing this plant seems like a smart financial decision, 331 people will be laid off as a result (via Food Dive). It appears to be an abrupt closure too, because operations stopped on July 18 and the facility will close for good on September 16.