The increasing price of raw materials [flour and cheese costs are said to be up by about 40% to 50%] and escalating operating expenses, coupled with disruptions in the supply chain, are forcing Amy’s Kitchen to close its organic pizza production plant in San Jose, California, according to CEO Fred Scarpulla.
The frozen food factory, which has been functional for only about 18 months and has reportedly losing about one million dollars a month since at least the beginning of 2022, is scheduled to be shuttered by mid-September and leave approximately 300 workers redundant in its wake.
In announcing the pending shutdown, the Petaluma, California-headquartered company issued the following statement:
“Like many other businesses, we are working to meet the challenge posted by widespread supply chain disruptions, fluctuating consumer demand and persistent inflation.”
It added: In addition to continuing employees’ salaries and benefits during the transition period, we have committed to provide all impacted employees with placement assistance.”
“With the inflation that’s going on, we had a huge increase in costs,” Scarpulla told the San Jose Mercury News. “We had supply chain disruptions, we experienced a lot of staff turnover and labor shortages. A lot of things disrupted production and created startup problems.”
The factory began production in March 2021, when demand for frozen pizza was booming during the coronavirus health crisis as many restaurants were closed and consumers were eating at home in large numbers.
“We ordered a crucial piece of equipment that we really needed for production and it just showed up this week,” Scarpulla told the San Jose Mercury News.
Capital expenses, mainly for building materials and machinery, were double what the company anticipated, reported the newspaper.
Elsewhere on the Amy’s Kitchen production front, the company’s other California plant in Santa Rosa and facilities in Oregon and Idaho continue to operate at full capacity.
Meanwhile, an NBC News dispatch on July 19 reported the plant closure announcement came after a labor union, Unite Here Local 19, filed unfair labor practice charges against Amy’s Kitchen to the National Labor Relations Board on June 1, alleging that workers have been disciplined for trying to organize a union.
Founded in 1987 by Andy and Rachel Berliner and named after their daughter, the company generates reportedly generates revenues exceeding $500 million per annum and employs about 2,600 people. It sources 69,000 tons or more of produce each year from organic farms to make a variety of some 250 sustainable organic and non-GMO frozen food and convenience items that are sold throughout the United States and 25 other countries around the world. In addition to pizza, products run the gamut from frozen burritos, wraps and bowls to vegetable pot pies, soups, beans, salsa and pasta sauce, cakes and cookies.
