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Fast-growing Santa Rosa organic food company faces first job cuts in two decades as consumers hunker down

Amy's Kitchen, the homegrown Santa Rosa company that has become one of the nation's leading makers of frozen organic meals, has cut jobs for the first time in two decades and is postponing plans to expand on the East Coast.

The once fast-growing company has trimmed costs as shoppers pare back spending on organic food and look for cheaper alternatives. It laid off 30 workers last week, with the cuts split between its Santa Rosa operations and its Medford, Ore., plant.

"We're a premium product, and people are trading down. People are buying less organic and making stuff from scratch," owner Andy Berliner said.

These are the first job cuts at Amy's Kitchen since the company temporarily stopped production during its first year in business in 1988, Berliner said.

Since then, the company has been growing more than 20 percent annually. But that will end this year. Revenues are projected to increase just 4 percent this year, reaching $250 million, the result of a decision to raise prices.

"We geared up for a bigger year before the recession hit. We certainly think it's going to be depressed into next year," he said. "We are fortunate to be holding our own in the current economic recession."

The job cuts are across the company's operations, from production lines to administrative positions. They amount to a 2 percent reduction, leaving Amy's Kitchen with 900 full-time employees in Santa Rosa and 600 in Medford, Berliner said.

Amy's Kitchen had been expanding to keep pace with what had been growing demand for its lines of frozen and canned vegetarian and organic food.

Last year the company added a canning line in Medford, just two years after opening the Oregon plant. Earlier, the company opened a second Santa Rosa plant and operates in five buildings here.

Amy's Kitchen wants to open an East Coast plant and has been looking at potential areas in states including Virginia, North Carolina and Tennessee, Berliner said. The company was aiming to open by 2011, but those plans have been pushed back at least two years, he said.


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