The News
PepsiCo Beverages US has closed its bottling plant in Knoxville, Tennessee, effective immediately, cutting 112 manufacturing, maintenance and warehouse jobs, according to a WARN notice reported by Food Dive. The company said its local sales and delivery teams will keep serving Knoxville-area customers.
Affected workers are paid through a notice period that ends Jan 1. PepsiCo said it is working to place them at nearby facilities.
“We’re not competing well in soft drinks,” CEO Ramon Laguarta said on the company’s Q3 call.
The Details
The closure comes as PepsiCo’s North American drink business shrinks and management looks for costs to cut. Beverage volume in North America fell 2% in Q3 while snack volume held flat. Laguarta told analysts the company would “look at every cost with aggressive lenses.”
North American beverage volume fell 2% in Q3 while North American snack volume was flat, Food Dive reported.
Laguarta said PepsiCo is “cutting costs in many areas of the business” to pay for investment in its soft drink brands.
Knoxville is the latest of several cuts to PepsiCo’s own US drink network. At Knoxville, Cheverly and Tulsa, production or warehouse work left while sales and delivery stayed.
In Cheverly, Maryland, PepsiCo ended manufacturing and warehouse work at a plant that had run for more than 60 years, laying off 143 people. “We must continue optimizing and modernizing our network to best serve customers and consumers,” a spokesperson said.
In Tulsa, Oklahoma, PepsiCo is ending warehouse operations at its production site and laying off 184 warehouse workers. The warehouse work moves to a new site in the Tulsa area. Production stays at the plant.
In October 2024, PepsiCo cut bottling work at four plants in Chicago, Cincinnati, Harrisburg, Pennsylvania, and Atlanta, affecting nearly 400 workers. Only Chicago closed fully.
PepsiCo has not said which plants will take over Knoxville’s production. On the Q3 call, Laguarta described a mix of moves for the US network, including handing more territory to independent bottlers.
Neither PepsiCo’s release nor the WARN filing says where production goes, Just Drinks reported.
Laguarta named automation, digitalization and network rationalization among PepsiCo’s productivity levers, pointing to “some asset divesting” in beverages, according to a call transcript.
He said PepsiCo is looking at whether to “expand or accelerate some of the refranchising” in parts of the country. Refranchising hands a territory’s bottling and distribution to an independent bottler.
Coca-Cola’s system is moving the other way. Coca-Cola and its bottlers plan to spend $10 billion on US production, distribution and offices by 2030.
The projects include a bottling plant in Colorado Springs, Colorado, a manufacturing plant in Indianapolis and Fairlife plants in Coopersville, Michigan, and Webster, New York.
Coca-Cola Consolidated, the largest US Coke bottler, operates in 14 states.
What’s Next
Pay for the Knoxville workers runs through Jan 1. PepsiCo’s Tulsa warehouse operations end Nov 15.
