OAK BROOK, IL — TreeHouse Foods, a multinational food processing company, will spend nearly $65 million on growth and supply chain initiatives, after having service and production issues in half of its categories.
The private label food manufacturer will put half of its $130 million capital expenditure budget toward capacity expansion and innovation capabilities, according to Pat O’Donnell, chief accounting officer for TreeHouse Foods. The remainder of the budget will be put toward maintenance and infrastructure.
At the present time, half of TreeHouse’s plants are operating at a normalized level of service. The company expects the remaining half will improve throughout 2023.
“We’re still seeing some pockets of labor challenges, a little bit of material availability and some line things, which is why you’re seeing us invest in CapEx,” O’Donnell said. He also shared that TreeHouse will spend more capital on maintenance and repairs to improve service levels in its plants over the next year.
The company continues to face production challenges in certain categories such as cookies, creamer and single serve beverages, with O’Donnell indicating that volume growth would have been higher had the company not faced lingering supply chain and service constraints.
In Q4, the company experienced 3% volume growth, compared to 4.2% in Q3.
“We’re working diligently to resolve our supply chain challenges and by the end of this year, we expect most of our categories to be very close to our target service level of 98%,” O’Donnell said.
