A major upgrade to the Lion Dairy and Drinks juice business will see 50 jobs lost at its Daily Drinks Company processing plants in Leeton and Sydney.
The Daily Drinks Co is to spend $28 million as part of a three year strategy to comprehensively modernise its Smithfield and Leeton juice manufacturing sites.
From next January the Leeton plant in the Murrumbidgee Irrigation Area will also be renamed The Leeton Juicing Company, recognising its focus on fresh processing.
However, blending and warehousing operations will be moved to Sydney, resulting in as many as 30 redundancies at the regional site.
In an Australian first, world class Ice Gen technology will be installed at Leeton, enabling the plant to seal in the natural freshness of juice immediately after extraction and retain this freshness during transportation.
Leeton’s current extraction role for The Daily Drinks Co and Lion’s cider business is also being gradually extended to include production of high quality fruit and vegetable juice for other industrial customers.
Japanese-owned Lion says its juice developments underpin its ambition to be a leading nutritional beverage company with sustainable profit growth.
Lion’s workforce of 6700 in Australia and New Zealand spans 34 sites, including juice plants, milk, cheese, yoghurt factories, dairy farms, large and craft breweries and wineries, plus more than 40 Liquor King retail outlets in NZ.
It boasts a clear 10-year strategy to transform its dairy and juice businesses and champion the nutritional credentials of the portfolio, while also building its presence in high-value Asian markets.
“This investment signals LDD’s commitment to Daily Drinks Co’s juice and non-alcoholic ready-to-drink business,” said Daily Drinks Co managing director, Charmaine England.
“The $28m investment will transform our manufacturing sites providing us every opportunity to compete and help secure our juice and non-alcoholic drinks business in Australia in the long term.”
The Smithfield site, which has already seen $18m invested in new water-ice processing lines in the past two years, will be transformed into a centre of excellence for juice blending and packing.
Leeton becomes a centre of excellence for fresh produce processing.
The Daily Drinks Co’s modernisation plans will upgrade juice blending equipment, creating capability for high quality, complex blends.
It will also install high speed packing equipment, and offering more scope for customised product while reducing the company’s environmental impact.
Ms England noted a number of major changes occurring in the juice marketplace, including a decline in popularity of three-litre and two-litre juice products.
Consumers were swinging to smaller pack formats, and wanted more craft and specialty juices.
“It’s important we are best set up to ensure we are agile and can easily adapt to the changing needs of the market,” she said.
“This significant investment highlights our belief in the juice industry and the focused approach we are taking to this market, consistent with our business turnaround plans.
“We will continue to target the high-value fresh juice category, fruit and vegetable juice blends and other key non-alcoholic ready to drink categories where we believe we can sustain profitability and category growth over the long term for the benefit of our business, growers, customers, distributors and other stakeholders.”
However, the transition would require significant operational changes, with all packing, blending and warehousing operations moving to Smithfield in a staged transition by late November.
Up to 20 roles will also be made redundant at Smithfield via a voluntary redundancy program which also applies at Leeton..
Redeployment opportunities across Lion’s broader Lion business, including relocation assistance would also be available, where appropriate.
“Any decision that results in job losses is highly regrettable,” Ms England said.
“These changes are no reflection on the people working at our sites – the hard work and contribution they have made to our
business over many years is very much appreciated.
“This announcement is about ensuring we remain a sustainable and viable operator in the juice and non-alcoholic drinks category today and in the future.
“As always our people are our primary focus and we are committed to supporting them and their families as we transition to this new operating model.”
Every employee whose job was impacted would receive full entitlements and offered outplacement support.
Free independent counseling was also being offered to all employees and their families.