Seattle-based chocolate company Theo Chocolate is restructuring its operations due to rising costs, the company said late last month.
As part of its restructuring plan, the chocolate maker will cease operations at its Seattle manufacturing facility by Aug. 30, a spokesperson told Supply Chain Dive in an email. Instead, its products will be made by a “strategic chocolate co-manufacturing partner,” with Theo Chocolate retaining control of sourcing and strategic partnering decisions.
The chocolate company has been contending with rising costs across all aspects of its manufacturing and supply chain operations, and initially began a plan to restructure its operations in Q2, according to the press release.
“Price increases and cost-savings initiatives were enacted as we navigated the recent post-pandemic landscape,” the spokesperson said. “Unfortunately, none were able to offset the rising costs of our operating model sufficiently, and the difficult decision to move forward with the operational restructure was necessary.”
The company plans to lay off 60 employees, with the majority of cuts a result of closing manufacturing, according to the spokesperson. Additional staff reductions are also being made across the company’s administrative operations as it relocates its business operations under the new model.
Employee separations will begin in the second half of 2023, according to the release. All impacted employees were offered a severance package as well as medical coverage, paid time off and job search resources.
In addition to restructuring its operations, Theo Chocolate intends to merge with minority stakeholder American Licorice Company, according to the press release. The proposed merger transaction is expected to close in Q3 while operational changes are currently underway.
Theo Chocolate isn’t the only company citing rising costs for confectionary products. Earlier this year movie theater chain AMC Entertainment Holdings announced plans to make its own candy brand to offset price increases from manufacturers.
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