Quaker Oats Plant Closes After Dozens Of Products Recalled
After 55 years of producing Quaker Oats products in Danville, Illinois, a company plant is closing, triggering layoffs for 510 employees. The City of Danville announced that PepsiCo will be officially closing the plant on June 8, 2024, though production has already ceased. This comes on the heels of two substantial recalls in December 2023 and January 2024 due to potential salmonella contamination, which can be spread via raw foods and contacted surfaces. The recall collectively targeted at least 60 products made at the plant.
The U.S. Food and Drug Administration (FDA) posted a news release in January announcing an extension of the December recall, now covering not only select Quaker Chewy Granola Bars but an array of cereals, cereal bars, protein bars, snack boxes, and select snack mixes. In a statement to The News-Gazette in Illinois, Quaker tied the Danville production facility closure to the recalls.
"Following the Quaker recall in December 2023, we paused production at the (Danville) facility," the company said. "After a detailed review, we determined that meeting our future manufacturing needs would require an extended closure for enhancements and modernization. In order to continue the timely delivery of Quaker products trusted by consumers since 1877, we determined production would need to permanently shift to other facilities." Quaker reportedly operates at least three other North American baking plants at present.
Quaker Oats' revenues were affected by the recalls
Modernizing the existing Quaker Oats Danville plant is even more unfeasible after revenue losses following the product recalls, according to PepsiCo. Its 2023 financial report indicated that Quaker Oats North America, which has been a staple since the late 1800s, had a drop in sales volume of 5% and an overall revenue reduction of 2% compared to 2022. In terms of operating profit, a reduction of 19% was attributed to fallout from the product recalls. Other factors include supply chain issues and manufacturing costs.
Danville employees had been on paid time off since the plant ceased operations, having been officially informed now that their jobs would no longer be available. They will continue to be paid until June 8, 2024, and county resources are available to assist with resume updates, unemployment applications, training classes, and information about potential job openings.
There's no word as yet about possible relocation opportunities at other Quaker facilities, according to employees, as reported by The News-Gazette. Employee Kimberly Ellison reflected on her nearly 25 years of working at the plant, stating that she doesn't know anything different from Quaker. "There's not a day that went by that I didn't enjoy going to work, and I didn't not want to go to work," she said. "I loved it. I can't say I have anything bad to even say about Quaker. But I am devastated."