Upstate Niagara Will Acquire Kraft-Heinz’s Campbell Plant and Invest $10 Million – Avoiding Closure
2015 Agreement and State’s Follow-Up Efforts Result in Four Facilities Remaining Open and Employing More Than 1,000 People in Upstate New York
Governor Andrew M. Cuomo and Senator Charles Schumer today announced an agreement has been reached that will save the at-risk Kraft-Heinz facility in Campbell, Steuben County, as well as at least 150 current employees. Upstate Niagara, a dairy farmer cooperative that includes member farms from multiple regions in Upstate New York, will acquire Kraft’s Campbell facility and has committed to investing $10 million in new machinery and equipment while retaining as many existing workers as possible.
"This agreement gives this facility a new lease on life, where it will continue to be an economic engine and major employer in the Campbell community for years to come," Governor Cuomo said. "Make no mistake: This plant was in real danger of closing, which would have been devastating locally and caused ripple effects across the entire region and New York's dairy industry. I thank Senator Schumer for working with us on finding this great upstate company to purchase this factory and helping to ensure the future of this and the other Kraft-Heinz plants that were facing imminent shutdowns."
"This agreement that Governor Cuomo and I put together with Kraft-Heinz is news we should all say ‘cheese about," Senator Schumer said. "Working together through many challenges – for over a year – we went from a grim situation, where the Campbell plant was on the verge of being boarded up, to where we are today: an Upstate New York company will buy the plant and keep it open for business – to the great benefit of scores and scores of the plant’s workers, as well as for regional dairy farmers and the local economy. I am hopeful with New York’s investment to modernize the Campbell plant there is a very real prospect we will be growing jobs here in the near future."
Upstate Niagara, a farm and dairy cooperative that has grown to include members from Western New York, Finger Lakes, Southern Tier, Central New York, North Country, and the Mohawk Valley, began producing great tasting, high-quality dairy products in 1971. What began as Upstate Milk grew steadily for years and then more rapidly in recent years, recent in the purchase of additional fluid and manufacturing facilities across Upstate New York, from Buffalo to Batavia and Rochester, and up to North Lawrence. With over 360 family-owned and operated farms, Upstate Niagara Cooperative is one of the largest and most stable dairy cooperatives in the United States.
In November 2015, Governor Cuomo and Senator Schumer worked with Kraft-Heinz officials to reach an agreement that would prevent the closure of three facilities and layoffs for nearly 1,000 employees in multiple locations in Upstate New York. Under the agreement, Kraft-Heinz continued operating the Avon, Walton and Lowville plants while investing tens of millions of dollars into modernizing operations. Additionally, Kraft-Heinz deferred its planned closure of the fourth facility, the Campbell plant, for one to two years, during which time the company worked with state, federal and local officials to identify a new operator.
Upstate Niagara has also reached an agreement with Empire State Development, committing to invest $10 million and retain the remaining 125 jobs and grow employment back to no less than 150 within one year. In return ESD has offered a grant of up to $5 million to assist with transitioning the facility, including the purchase and installation of machinery and equipment.
"We’re thrilled to announce that Upstate Niagara Cooperative has agreed to purchase our Campbell dairy facility and has signed a long-term co-packing agreement with Kraft Heinz," said Michael Mullen, SVP of Corporate & Government Affairs at The Kraft Heinz Company. "This deal guarantees that at least 125 jobs will remain in Campbell with anticipated growth to 150 within a year, during which and that our business customers will experience zero disruption in the service of our dairy products. As part of our commitment to this transaction, Kraft Heinz has pledged an ongoing investment of $3 to 5 million to improve and maintain the Campbell facility."
"We look forward to adding the Campbell cheese facility to our organization in the coming weeks," stated Larry Webster, CEO of Upstate Niagara Cooperative. "As a dairy cooperative owned by farm families throughout the region, this acquisition is an investment by our member owners towards continued and long-term growth for our cooperative and the Campbell facility. We are proud to be able to keep manufacturing jobs within the community while offering additional products and manufacturing capabilities to our customers."
Empire State Development President, CEO & Commissioner Howard Zemsky said: "This transaction has been one of the Governor’s highest priorities and I'm pleased that ESD could help Kraft-Heinz and Upstate Niagara reach a deal to transition to new owners, while modernizing the plant and saving at least 150 jobs. The dairy economy is critical to our upstate economy and Governor Cuomo prioritizes it as such. Economic development is a team sport, and we also thank our partners at the Steuben County IDA for their great teamwork in finding a successful resolution."
The 2015 agreement came following the merger of Kraft and the H. J. Heinz Company that summer. The merger triggered an internal company review which put the facilities at Avon, Walton, Lowville and Campbell in line for closure – thereby reducing their total employment in New York State by nearly 1,000 jobs. Upon hearing of the merger and associated review, Governor Cuomo contacted Kraft-Heinz CEO Bernardo Hees to express the urgency of retaining employment in New York, and worked collaboratively with the company and Senator Schumer in negotiating a deal to save as many jobs as possible and ensure future investment and growth.