Campbell Soup Co. will close its 87-year-old Toronto factory and shift production to the United States amid a decline in soup consumption.
About 380 manufacturing jobs will be lost when the factory in south Etobicoke closes within 18 months, the company said on Tuesday.
Ana Dominguez, president of Campbell Canada, said the Canadian market will be served by Campbell Soup's larger, more efficient plants in Maxton, N.C., Napoleon, Ohio, and Paris, Tex. The shift will not result in any job gains at the U.S. plants. "We produce more soups than we can actually sell," Ms. Dominguez said by phone.
Story continues below advertisement
"We needed to consolidate the production and have fewer plants producing the volume that we need," she said. "Unfortunately the plant in Toronto, because it is the smallest and the oldest, couldn't be economically changed to meet our future needs so this is the one that we have decided to shut down."
"It's been a tough day. We gave some sad news to great people," said Ms. Dominguez, who told the employees of the shutdown at a 2 p.m. meeting in the plant's warehouse.
Suzanne van Bommel, chair of the Ontario Processing Vegetable Growers, said the plant is a big buyer of Ontario crops, and its loss would be a "big hit" for farmers.
Campbell Soup buys 4,800 tonnes of carrots from growers in the Holland Marsh region north of Toronto, an area known for rich wet soil, Ms. van Bommel said. Growers have yet to begin negotiations on contracts for this year's crop and hope to reach agreements for 2019, she said.
"They're going to struggle," Ms. van Bommel said by phone. "We're obviously disappointed but also pretty keenly aware of the pressures on food processors," she said, adding the organization has been seeking ways to attract and retain food processors in the province.
Ms. Dominguez said Canadian farmers will "absolutely" have a chance to seek contracts to supply U.S. plants. She said Campbell Soup has unique soup recipes for the Canadian market and will make those at the U.S. plants for export to Canada.
About 200 jobs in sales and other commercial operations will be relocated to a new office in the Toronto area. That site has not been picked yet, the company said.
The Campbell Soup plant joins a growing list of older food factories in Ontario and Quebec that have closed due to inefficiencies and high operating costs. Many manufacturers, including HJ Heinz, moved production to U.S. plants rather than upgrade Canadian facilities.
Ms. van Bommel said the food manufacturing sector has surpassed the auto industry by number of jobs and is growing in importance.
Campbell Soup said the Toronto shutdown is part of a previously announced plan to cut costs amid declining sales. The multi-year effort has saved the company $345-million (U.S.) in yearly operating costs, the company said in a statement.
Publicly traded Campbell is headquartered in Camden, N.J. It employs 18,500 people worldwide and has yearly sales of about $8-billion.