US-based Coffee Holding Co. will close its Comfort Foods manufacturing facility in Massachusetts at the end of the month.
Amid waning sales for its Harmony Bay brand, the wholesale coffee roaster and dealer will shift production at the North Andover site to its Second Empire plant in Port Chester, New York.
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In a statement yesterday (8 October), president and CEO Andrew Gordon said the move will “improve efficiencies by providing us with both manufacturing and logistical cost savings”.
Coffee Holding acquired the site in 2017 as part of the deal that saw it take over Comfort Foods.
Last November, the company snapped up New York-based Empire Coffee Company.
Gordon said roasting and manufacturing on the East Coast through the Comfort Foods site had “proved to be a winning strategy” as the company picked up sales in supermarket chains in the region.
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By GlobalData“As the coffee industry continues to evolve, we began to experience a steady decline in sales for the Harmony Bay product line, similar to what most regional brands have experienced,” Gordon said. “This is due to the fact that major supermarket chains have reduced shelf space that was once allocated to regional brands in order to accommodate the few remaining national brands, and the advertising dollars supporting them.”
Comfort Foods’ profits were hit, Gordon added, though the site was still used for private-label products.
However, the company has decided to use the New York site for the production in North Andover.
“This transfer of production location will improve efficiencies by providing us with both manufacturing and logistical cost savings. We believe that these operational improvements should have a positive effect on profitability,” Gordon said.
Coffee Holding reported a 27% jump in revenue for its fiscal third quarter ended 31 July but fell into the red after losses tied to derivatives.
The Staten Island–based coffee roaster and distributor’s net sales rose to $23.9m from $18.8m in the year-ago period.
Despite the top-line growth, the company recorded a net loss of $1.2m for the quarter.
Announcing the results last month, Gordon said derivative positions drove a $2.2m negative impact on profitability during the period.
