North Aurora, Illinois – Oberweis Dairy Inc. recently announced plans to lay off 127 workers at its North Aurora plant as a result of filing for Chapter 11 bankruptcy. The company, known for its popular ice cream stores and milk packaged in glass bottles, cited the closure of the plant as the reason for the impending job cuts, which are set to begin on June 11.
According to court records, Oberweis filed a voluntary petition for Chapter 11 bankruptcy protection in the Northern District of Illinois. The company disclosed owing more than $4 million in total unsecured claims to its top 20 creditors, with the largest debt exceeding $774,000 to a transportation company based in Hudson.
Despite employing approximately 1,100 individuals, including many part-time workers, Oberweis Dairy faces significant financial challenges that have led to this decision. The company’s president, Adam Karber, stated in a court filing that Oberweis will continue operating while actively seeking a buyer to preserve over 1,000 jobs and maximize value for creditors.
Oberweis Dairy, owned by the family of Republican state politician Jim Oberweis, has struggled amidst declining U.S. milk consumption and an increased demand for plant-based alternatives. The company experienced a surge in revenue during the COVID-19 pandemic, mainly due to its home delivery service, but faced setbacks due to high expenses and inefficiencies.
Challenges such as underinvestment in manufacturing equipment, overspending on distribution, and unsuccessful attempts to enter new markets have contributed to Oberweis Dairy’s financial woes. The company’s long history, dating back to its founding by Peter Oberweis in 1915, has seen various successes and setbacks over the years.
As the dairy industry evolves and consumer preferences shift, Oberweis Dairy’s future remains uncertain. The company’s decision to file for bankruptcy and the subsequent layoffs highlight the difficult landscape faced by traditional dairy businesses in a changing market. Despite the setbacks, Oberweis Dairy continues to seek opportunities for growth and sustainability in the face of ongoing challenges.