The new facility, opened on Friday by Hugh Bayley MP, will be run by contract packaging provider IPS First, which will pack goods across the Nestle product range.
It will be responsible for handling between 200 and 400 product lines, including confectionery, but extending to other Nestle food and beverage products.
Nestle spokesperson Liz Hayes said the new plant, which began production last month with 100 workers, is highly flexible so can, for example, adjust quickly and efficiently from chocolate bars to coffee.
Located in a redundant stores building at the Nestle distribution centre in York, the new factory will help the food company cut its transportation costs.
Slimmer packaging network
Hayes said the company used to have a network of five co-packaging plants across the UK but now the company only has the facility in York and one other in Bardon.
By reducing the total number of co-packing plants and opening a facility at its distribution centre, Nestle will cut mileage and reduce costs.
Nestle said the move will cut the need for around 4000 lorry journeys per year, equivalent to transporting goods around 300,000 miles.
Paul Grimwood, CEO of Nestle UK and Ireland said: “It makes sound environmental and business sense to bring Nestle’s co-packing to one of our largest distribution centres.
“We are constantly driving greater efficiency through our business and opening this new site is a really positive step forward in reducing the number of road miles that our products travel.”
Nestle is working to reduce its transport costs at a time when the EU and member states are putting pressure on companies to implement more sustainable distribution systems.
On a European level, proposals have been mooted for a new toll of a few cents per kilometre on freight haulage companies based on the polluter pays principle.