PepsiCo is set to close a Frito-Lay distribution plant in California as part of its efforts to align production with declining demand. The Rancho Cucamonga facility will cease operations on June 6, resulting in 248 layoffs, according to a WARN notice filed with the state of California. PepsiCo had previously ended manufacturing operations at the plant in 2025 but continued distribution and warehousing activities until now.
The company plans to relocate these operations to a new distribution center in the local community to better serve customers and consumers. This move is in line with PepsiCo’s strategy to optimize its network and adapt to changing consumer preferences.
Amidst a challenging market environment, Frito-Lay has experienced a decline in demand, attributed to factors such as inflation and shifting consumer preferences towards healthier options. During its recent earnings call, PepsiCo reported a 2% decrease in volume and organic revenue in its North American food division for fiscal 2025.
To address these challenges, PepsiCo has been actively reshaping its product portfolio to drive growth and enhance consumer appeal. This includes reducing product offerings, adjusting prices, and introducing healthier versions of popular snacks like Cheetos and Doritos without artificial dyes, with a focus on added protein, fiber, and whole grains.