The manufacturer of Cheetos has revealed the fate of the popular snack after declaring bankruptcy following a child labor scandal.
Despite its parent company declaring bankruptcy, Hearthside Food Solutions – which also produces products for brands including Kraft, Kellogg’s, Mondelez, General Mills and PepsiCo – has said it plans to continue operations as normal.
This means Cheetos and other popular snacks like Lucky Charms and PepsiCo’s Lay’s chips will still be available as usual.
Parent company H-Food Holdings LLC filed for bankruptcy on Nov. 22 after racking up $1.9 billion in debt.
Hearthside Food Solutions, based in Downers Grove, Illinois, said it will continue paying employee salaries and benefits, maintaining customer programs and fulfilling supplier obligations.
To finance these activities during the bankruptcy process, the company filed a motion seeking approval for $300 million in financing.
Hearthside CEO Darlene Nicosia said in a statement: “We have taken decisive action across our company to move past our past challenges and are encouraged by the improvement we have already seen.
“Today’s announcement marks an incredibly important step forward for Hearthside, our valued customers and our dedicated team as we continue to transform our business for the future,” said Nicosia.
Hearthside Food Solutions – which also produces products for brands including Kraft, Kellogg’s, Mondelez, General Mills and PepsiCo – has said it plans to continue operations as normal.
She continued: “With a sustainable capital structure and significant inflows of new capital to fund our long-term plan, we will be well-equipped to strengthen our leadership in the food manufacturing industry as we drive continued innovation and growth.”
The company aims to emerge from bankruptcy in the first quarter of 2025.
The bankruptcy filing comes after the company came under scrutiny over allegations of child labor in its snack factories.
In February 2023, The New York Times reported that migrant children worked in unsafe conditions at Hearthside Food Solution facilities to produce their products.
The company said it never knowingly employed underage workers in its factories and denied allegations that the work environment was unsafe.
The company said it has cut ties with third-party staffing firms and strengthened its employment practices following the report, according to The Sun.
The article sparked media and customer backlash and “immediate and serious” consequences, including government investigations.
Hearthside Food Solutions added that the investigation did not result in any fines and was not the main reason for the bankruptcy filing.
It is one of many companies that have filed for bankruptcy this year.
Parent company H-Food Holdings LLC filed for bankruptcy on November 22 after accumulating $1.9 billion in debt
The bankruptcy filing comes after the company came under scrutiny over allegations of child labor in its snack factories
Stoli Group USA, owner of the Stoli brand of vodka, filed for bankruptcy at the end of last month because it is experiencing ‘financial difficulties’.
The company also says it has been the victim of a major cyber attack and has been embroiled in an ongoing legal battle with the Russian government for years, which has cost “tens of millions of dollars.”
Retail businesses in particular have also had to contend with rampant in-store theft and increasingly tight margins.
The last high-profile chain to file for bankruptcy in September was discount retailer Big Lots.
Big Lots announced the latest round of store closures in November as the company navigates bankruptcy proceedings.