Floods Hit PepsiCo's Quaker Manufacturing Facility

Cedar Rapids, Iowa, plant closed for one day, disruptions expected.

Food and beverage maker PepsiCo said yesterday that its Quaker manufacturing facility in Cedar Rapids, Iowa, has been impacted by the historic flooding in the area. The company closed the plant on June 11, but engineers and safety resources have since been able to tour the facility.

While the situation assessment is ongoing, PepsiCo expects disruptions to normal service over the next few weeks, including product allocation to the retail trade of some Quaker foods and snacks items.

The company has dedicated resources to ensure a speedy return to full production and also has redirected some production to other Quaker facilities. The company also has insurance to cover both the facility and business interruption.

Flooding in many areas of the Midwest has also impacted grain plantings. As previously indicated during its first-quarter earnings call, Pepsico is largely covered on key commodities through 2008 and its coverage on corn extends into 2009.

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