Rapid Growth of Baskin-Robbins International Drove Decision
PETERBOROUGH, ON, July 18, 2012 /CNW/ - In October 2012, Baskin-Robbins
will close its Peterborough, Ontario, Canada manufacturing plant and
shift production to existing partner suppliers. Production of ice cream
for Baskin-Robbins shops located in Canada will shift to Scotsburn
Dairy of Truro, Nova Scotia. The dairy already produces Baskin-Robbins
ice cream products.
"We deeply regret the need to close the Peterborough plant, but the
facility, which is already operating around the clock, is unable to
keep up with the demands of our rapidly growing international
business," said Peter Laport, Vice President, Global Strategic
Manufacturing and Supply, Baskin-Robbins. "We have explored other
options, but modernizing the facility and adding capacity are
unfortunately not viable. We appreciate the dedication of our
Peterborough employees and are committed to help them through this
All Baskin-Robbins employees at the plant will be offered severance
compensation and benefits that include counseling, resume support and
career planning assistance.
Eighty people work at the Peterborough plant. Forty-six of those
employees are represented by Canadian Auto Workers (CAW) union, and
Baskin-Robbins will work with the union in regard to the closure.
Approximately 15 positions will be eliminated by the end of July, with
the remaining positions phased out as plant operations ramp down and
the facility closes by mid-October. A few managers will stay on until
the end of the year.
Currently, the Peterborough plant produces ice cream for approximately
one-third of Baskin-Robbins' more than 4,200 shops outside the United
States. Ice cream that had been produced in Peterborough for shops
other than those in Canada will shift to Dean Foods. This will support
Baskin-Robbins' increasing need to provide ice cream to a growing
number of international franchisees and their customers. It also
provides several other important business benefits:
Innovation - provides more opportunity to create new Baskin-Robbins
flavors and ice cream products
Supply chain - enables potential to manufacture at additional Dean Food
plants, supporting continuity of supply and future growth
Sourcing effectiveness - moves production closer to primary ingredient
Another significant factor in the closure decision is Baskin-Robbins'
strategy to transition entirely to third-party companies to manufacture
its ice cream.
"Peterborough is the only remaining manufacturing facility we operate in
North America," said Laport. "We believe it makes sense to focus on our
core skills of franchising, retail and product innovation, rather than
ice cream production."
The Company expects to incur one-time charges in 2012 of approximately
$16 million to $18 million, including a $4 million non-cash charge,
associated with the closing of the plant. Beginning in 2013, the
Company currently expects annual savings of approximately $4 million to
$5 million as a result of transferring production to third-party
Baskin-Robbins remains committed to the Canadian market, where it has a
total of 113 franchised shops with approximately 550 full-time and
part-time employees. In addition to continuing to manufacture ice cream
for Canadian shops at the Scotsburn Dairy in Nova Scotia, the company
is actively recruiting additional franchisees to expand its current
base of Baskin-Robbins shops in Canada.
Named the top ice cream and frozen dessert franchise in the United
States by Entrepreneur magazine's 31st annual Franchise 500® ranking,
Baskin-Robbins is the world's largest chain of ice cream specialty
shops. Baskin-Robbins creates and markets innovative, premium hard
scoop ice cream and soft serve, custom ice cream cakes and a full range
of beverages, providing quality and value to consumers at more than
6,700 retail shops in nearly 50 countries. Baskin-Robbins was founded
in 1945 by two ice cream enthusiasts whose passion led to the creation
of more than 1,000 ice cream flavors and a wide variety of delicious
treats. For the full-year 2011, Baskin-Robbins' shops had global
franchisee-reported sales of approximately $1.8 billion. For further
information, visit www.BaskinRobbins.com.
For further information:
Director, Global Public Relations
Dunkin' Brands, Inc.