Danone to Lay Off 114 Employees After Shutting Plant-Based Dairy Factory

Why It Matters

The closure highlights the difficulty U.S. plant‑based milk brands face amid modest market growth, while forcing Danone to restructure costs and supply chains. It also signals a strategic pivot toward higher‑margin products and geographic consolidation.

Key Takeaways

• Danone cuts 114 jobs, closes 25‑year‑old New Jersey plant.
• Production moves to facilities in Virginia, Texas, and Florida.
• US plant‑based milk sales fell 2% to $2.7 billion in 2025.
• Silk and So Delicious underperformed versus strong European Alpro growth.
• Danone launches high‑protein Silk milk while consolidating manufacturing.

Pulse Analysis

The U.S. plant‑based dairy sector has entered a period of consolidation, with retail sales of non‑dairy milk slipping 2% to roughly $2.7 billion in 2025. While soy and coconut milks posted modest gains, the overall slowdown has pressured incumbents like Danone, whose Silk and So Delicious lines failed to capture the growth seen in other categories. Danone’s decision to shutter its New Jersey plant reflects a need to trim excess capacity and reallocate resources toward more profitable segments, such as ready‑to‑drink beverages and high‑protein offerings.

Operationally, the closure will affect 114 workers under the WARN Act, giving them a 60‑day notice before layoffs take effect between August and November. Danone plans to shift production to three existing U.S. facilities in Mt. Crawford, Virginia; Dallas, Texas; and Jacksonville, Florida, preserving supply continuity for its plant‑based portfolio. This geographic re‑tooling reduces logistics costs and leverages newer, more efficient plants, but it also underscores the challenges of maintaining a dedicated manufacturing footprint for a market that is not expanding at the pace once projected.

Strategically, Danone remains committed to the plant‑based space, betting on product innovation rather than volume growth. In Europe, its Alpro brand commands over half of the vegan yoghurt market and enjoys double‑digit sales expansion. In the U.S., the company is pushing high‑protein Silk milk and expanding its portfolio with nutrition brands like Kate Farms and Huel. By consolidating manufacturing while investing in differentiated, high‑margin products, Danone aims to balance cost pressures with growth opportunities in a fragmented plant‑based landscape.