Mondelēz investing $50 million in U.K. coffee plant

by Eric Schroeder
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BANBURY, ENGLAND — Mondelēz International, the second largest company in the global coffee market, will invest $50 million in its Banbury plant to build two new lines that will manufacture Tassimo beverage capsules. Tassimo is Europe’s fastest growing single-serve system, according to Mondelēz, brewing a variety of beverages, including Jacobs and Costa coffees and Cadbury hot chocolate.

The expansion is part of Mondelēz’s multi-year investment in European manufacturing. The company said it already has invested $1.5 billion since 2010, and the most recent planned investment is expected to create close to 80 jobs. The investment also coincides with the 50th anniversary of the Banbury facility, which produces coffee brands such as Kenco, Carte Noire and Maxwell House. The Tassimo capsules produced in Banbury will be exported to Western European coffee markets in France and Spain as well as distributed in the U.K., Mondelēz said.

“Tassimo is a key driver of growth for our European coffee business, so this $50 million opportunity is a great one for Banbury,” said Phil Hodges, senior vice-president, integrated supply chain, Mondelēz Europe. “Over the past 18 months, we’ve made similar investments in Bournville and Sheffield, underscoring our commitment to U.K. manufacturing. The proposed investment is part of our vision to manufacture our products on state-of-the-art lines that will enable us to meet growing demand while increasing our competitiveness.”

The Tassimo beverage system was developed in Banbury prior to its launch in Europe in 2004. The system uses barcode technology to calculate the right amount of water, brewing time, and temperature for the specific beverage. Over the past five years, Mondelēz said Tassimo achieved “strong double-digit growth in Europe through a winning formula of convenience, an unrivalled brand portfolio and quality coffee.”

“The proposed investment opportunity demonstrates that, in an increasingly competitive environment, the U.K. continues to be a prime location for large-scale manufacturing,” said Paul Sinclair, head of manufacturing at the Mondelēz International Banbury site. “We’re committed to securing this investment for Banbury by increasing flexibility and competitiveness, and we’re excited about showcasing the quality we can deliver to coffee drinkers in the U.K. and abroad by producing Tassimo in our factory.”

Mr. Hodges said the investment is part of Mondelēz’s ongoing supply chain reinvention plan, which is expected to deliver $3 billion in gross-productivity savings, $1.5 billion in net savings and $1 billion in incremental cash over the next three years.

The investment follows Mondelēz Europe’s announced $100 million commitment to build a biscuit plant in Czech Republic earlier this year, as well as the potential new investment of approximately $100 million for the Bournville chocolate manufacturing site in Birmingham, U.K.
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