Pepsico is closing its Frito-Lay distribution facility in Rancho Cucamonga, California, eliminating 248 jobs as the snack giant grapples with declining sales. The company cited lagging demand and the need to balance production capacity with market realities. The closure, set for June 6, 2026, follows a 0.2% revenue decline in the fourth quarter of 2024 and a 3% drop in Frito-Lay's sales volume.

This downsizing reflects broader challenges in the snack food industry. Consumers are buying fewer snacks due to inflation, higher borrowing costs, and increased focus on health and wellness. The trend extends beyond Pepsico - The JM Smucker Co., which acquired Hostess for $5.6 billion in 2023, reported disappointing third-quarter results through January 2026, with Sweet Baked Snacks sales falling below expectations.

Industry-wide pressures have pushed some companies to the brink. CandyWarehouse.com Inc. filed for Chapter 11 bankruptcy on October 24, 2025, just before Halloween, citing significant revenue declines. The consolidation of distribution centers and workforce reductions signals a fundamental shift in the snack food sector as companies adapt to changing consumer preferences and economic pressures.