Food companies cut 30,000 jobs as grocery sales slump

Consumers are spending less and changing what they eat and drink, causing the food industry to rethink its products and offerings. ©Image Credit: Unsplash / Vitaly Gariev

The food industry is taking a massive hit as a whopping 30,000 jobs have been lost as of September. This marks a 76% increase over job losses during the same period just one year earlier, signaling that industry layoffs are piling up.

Consumer spending is down

Digging into the data, the layoffs have accelerated as consumer spending declines. According to executive outplacement firm Challenger, Gray & Christmas, a total of 29,693 jobs have been cut as of September.

Last year at this time, 16,835 jobs had been cut.

In the months of August and September, the firm's data showed that the food industry was responsible for the bulk of layoffs. The layoffs spanned food and beverage producers countrywide.

Food and beverage producers are struggling to adapt

Not only is there a dip in consumer spending, but consumers have changed their eating habits. There is a growing push for foods and drinks that offer additional health benefits.

All you have to do is look at the high-protein craze to see that people are becoming picky about what they buy and consume.

Some food and beverage producers have been caught flat-footed as they figure out how to pivot or scale back operations.

This month alone, some of the biggest food and drink producers have announced facility layoffs and closures. Companies include Tyson Foods, Campbell's, Sapporo USA, Amy's Kitchen, PepsiCo, Guinness and Nestlé.

Companies look to reorganization and improving efficiency

Each company is doing what it can to adapt, but many seem to be choosing reorganization and improving efficiency.

PepsiCo has been working on both this year with a goal of cutting costs while responding to changing consumer demand.

“We are not competing well in soft drinks,” PepsiCo CEO Ramon Laguarta acknowledged during the company’s third-quarter earnings call.

The company was hit with a 2% decline in North American beverage volume during the third quarter.

No word on when the layoffs will end

One of the most alarming aspects of this trend is that there are no signs of it slowing. Job losses look like they will continue in the food industry.

Sources: Food Dive, The Street

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