US manufacturing has had a rough 2025.
With tariffs on inputs like aluminum and steel soaring, plus of course uncertainty tied to import/export volatility, plus general macroeconomic malaise…it’s not been easy at all.
Unfortunately, when the US economy gets uncertain, manufacturers are often faced with the tough choice of what to do with potential excess capacity.
Put differently: Job cuts.
The latest victims? 600 workers in Sacramento.
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For those unfamiliar, Blue Diamond is basically synonymous with snacking almonds.
Their tins of salted (and often flavored) almonds have been gracing grocery store shelves for decades, and the company itself is a co-op that’s been in operation for over 100 years and counts 3,000+ almond farmers as members.
And with everything that’s going on, Blue Diamond has decided to close its Sacramento plant and transfer manufacturing operations to locations in Salida and Turlock.
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At its core, this is about reducing costs.
(Important when margins are under pressure due to all the economic impacts we’ve already discussed.)
They’re able to run the Central Valley plants for less (my guess is property taxes are a component, but that’s just a guess), so they’re shifting to the cheaper localities.
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Fortunately, Blue Diamond is taking time to really take care of people.
The plant will be shutting down in 18-24 months, and they’re providing severance and outplacement support to affected staff.
They’re also giving some folks the option of relocating to one of the other plants, which of course likely comes with a worse commute…but nice to keep a job if you can.
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Almond prices are up over 50% year-over-year, which again reflects the macroeconomic uncertainties we’ve been seeing.
What’s more, supply has tightened due to reduced crop sizes, which is furthering the imbalance with demand and driving up prices.
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Producers like Blue Diamond don’t want to pass those costs on to consumers in the form of higher prices.
Because of course the risk is that no one wants to buy something that’s 50% more expensive after just a year!
So they’re stuck with trying to cut costs elsewhere and pass along a smaller price increase while only sacrificing some margin.
They’re in a tough spot.
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Fortunately, they do have some options – like trying to launch more specialty brands – and they’re leaning into those wherever possible.
They recently launched “honey hot almonds” in collaboration with Mike’s Hot Honey – at the very least, it’s an interesting flavor that may drive some demand.
And they also just relaunched their Barista Blend Almondmilk with new packaging – so they’re pulling what levers they can.
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Unfortunately it’s just the nature of things this year – whether it’s eggs, or avocados (impacted by tariffs on Mexico), or almonds – lots of foods are getting more expensive.
Which have been most frustrating for you?
Let us know in the comments.
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