Dive Brief:
- Abbott will close a nutritious food and beverage manufacturing plant in Fairfield, California, and lay off 195 workers next month, the company said in a Worker Adjustment and Retraining Notification (WARN) Act notice.
- The first set of layoffs will begin May 18 and will continue through September. Most of the roles are in manufacturing and operations, according to the notice.
- The job cuts at the Chicago-based company are because of efforts to significantly reduce costs, according to the notice. The company did not immediately reply to a request for comment.
Dive Insight:
Abbott’s nutrition segment makes products like Pedialyte, as well as protein shakes and granola bars for children and adults. Ensure and Glucerna are the company’s market-leading brands, according to its website.
Abbott also operates a nutrition manufacturing factory in Sturgis, Michigan, and is building another in Bowling Green, Ohio, which is slated to open in 2026.
Nutrition is comparably one of Abbott’s smallest business units, with the medical device and diagnostics segments driving most of the company’s Q4 sales, according to its Q4 2023 earnings press release.
Yet even with the factory closure, Abbott’s nutrition segment is accelerating as “people around the world [place] a greater emphasis on protecting their health,” Chairman and CEO Robert Ford said during the company’s Q4 2023 earnings call.
In the U.S., nutrition sales reached $860 million for the quarter, up 8.2% from 2022, and were “primarily driven by market share recovery in the infant formula business following a voluntary recall of certain products last year,” Abbott stated in a press release. The company underwent a lengthy recall of its baby formula brands in 2022 after its Sturgis plant manufactured products containing the bacteria Cronobacter sakazakii, which led to four infant hospitalizations and two deaths.
Looking forward, Abbott’s nutrition segment is focusing more on adults, announcing the launch of a new nutritional drink for GLP-1 users this year, Ford said in the call.
“I think a big growth driver for us going forward is really going to be the adult segment, which is growing high single-digits, and of which we've got very high market share positions across the globe,” Ford said. “And this position with the brand we have, the science that we have, really aligns to, I'd say, a pretty sustainable demographic trend that we're seeing, which is just an aging population that is focusing on health care and on nutrition.”
Other companies like Herbalife have also recently launched nutrition food and supplement products for adults using GLP-1 weight loss medications as the segment explodes in the U.S.
