By the BF Staff
From the January/February 2017 Issue
Whether the topic is salaries, staffing or capital spending, food production professionals who responded to Food Processing’s 16th annual Manufacturing Outlook Survey were less certain about what the new year would mean than their peers who provided feedback in recent years. The ambivalence extended to their expectations for production in their own facilities, though twice as many anticipate an expansion in the number of lines or plants operated by their companies than a contraction or consolidation.
One development they are sure about is enforcement of the Food Safety Modernization Act (FSMA), with compliance required by all but the smallest processors by September. FSMA readiness ranked as the third most important issue in 2017, just below cost control and two notches behind food safety, the perennial top issue in food & beverage manufacturing.
General staff training nudged up in the top-issues rankings, although very few (one in 27) rated it as a top concern. FSMA requires food-safety training of every production worker, with documentation of the dates and successful completion of that training. Asked what steps they were taking to upgrade sanitation and food safety practices, three-quarters of survey respondents cited employee training, up sharply from recent years. Validation of the effectiveness of cleaning and sanitation procedures “in accordance with FSMA” will be vital, a beverage manufacturer volunteered.
Participation in independent food safety audits of their facilities also is on the rise. Major retailers and food service operators are pressuring their suppliers to seek certification under one of the food safety standards endorsed by the Global Food Safety Initiative, and most respondents indicated their companies have done so. One in five is audited under proprietary standards created by firms such as Silliker and AIB International. Only 15 percent say certification under any standard is not being considered.
To increase the odds that their facilities will pass those audits, half of the survey participants say their companies are upgrading sanitation equipment, up from a third three years ago. Rapid microbial testing to validate the effectiveness of cleaning programs is used by three out of 10, 50 percent higher than in 2014. Beefed up HACCP plans, pest control and the use of expert consultants also are becoming more common.
Food industry employment mirrors the U.S. manufacturing sector, where the number of jobs is down 37 percent since its 1979 peak while output has more than doubled. Automation is the single biggest factor, and food companies face the same challenges as other manufacturers in recruiting and retaining qualified individuals to keep lines running.
PACMOORE THRIVES IN MOORESVILLE, IN
PacMoore is one of the nation’s leading food processing contract manufacturers, processing approximately 200 million pounds per year and growing. Founded in 1992, with headquarters in Hammond, IN, the company has added two more facilities including a product development facility at PacMoore Innovation Laboratory in Gridley, IL and its second production facility at PacMoore Process Technologies located in Mooresville in central Indiana.
PacMoore’s 2006 addition of the second large-scale production facility became necessary when the company secured a long-term contract with National Starch located in Indianapolis. It needed to set up operations that not only allowed for increased capacity, but also in a locale that allowed it to most efficiently service the contract and increase its customer base.
Since opening, the company’s Mooresville plant has grown steadily and now employs more than 200 workers. PacMoore worked with site selectors to choose the 15-acre greenfield site just minutes southwest of Indianapolis, which allowed for expansion, connectivity to suppliers and ample distribution channels.
Electric provider South Central Indiana REMC, a member owner of Hoosier Energy Rural Electric Cooperative, serves several adjacent commercial customers and easily accommodated the plant’s growth and development.
“We already had the infrastructure in place and worked with PacMoore’s leadership to understand their vision for the property and to allow for expansion without service interruption,” said Jim Wittman, key accounts manager for Hoosier Energy.
The original 100,000-square-foot facility doubled in size in 2012 to 200,000 square feet to accommodate additional warehouse and office space. The site can accommodate another 100,000-square-foot addition as the business grows.
PacMoore’s Vice President of Marketing, Chris Bekermeier, credits a strong alliance of community leaders, its electric provider, economic development professionals and the workforce in Mooresville for helping make expansion a win-win for the company and the community.
“We looked at many sites and narrowed it down to three with Mooresville ultimately becoming the right home for our operation. While the town’s name is indeed serendipitous, it really was the local leadership who was committed to helping grow jobs for the community and the hardworking people in the area that made this location ideal,” said Bekermeier.
PacMoore provides packaging and labeling, blending, sifting, spraying and turnkey processing. It partners with food manufacturers, commercial restaurants, institutional food service companies and distributors, retailers and pharmaceutical product businesses, working with well-known brands, including General Mills, Kraft/Nabisco and Pinnacle Foods.
The company is part of Indiana’s thriving agribusiness industry that includes Ken’s Foods, Dow, DuPont, Krone North America and Blue Buffalo. The Indiana Economic Development Corporation reports that the state’s growing agriculture industry supports more than 107,000 Hoosier jobs and contributes an estimated $31 billion to the state’s economy each year.
Meanwhile, the Hoosier state continues to receive accolades from national publications as a top destination for business growth, including recognition for having the best business climate in the Midwest and fifth best in the nation from Chief Executive Magazine.
Along with facility expansions, PacMoore has continued to add capabilities and new technology at the Mooresville plant during its more than 10 years in operation.
The company added a spray dryer representing a $5.5 million investment. The full-scale spray dryer can accommodate various moisture levels, particle sizes, colors and pH levels to process a wide variety of product types without ignoring efficiency and cost effectiveness.
In December 2016, PacMoore proudly dedicated and ran the first production on its full-scale Coperion 120mm twin-screw extruder. This $4.5 million food extrusion system is expected to produce up to 3,000 pounds per hour of a variety of finished products, such as protein-fortified crisps, crisp grains, cookie inclusions, textured vegetable proteins and precooked flours and starches. Equipment features include a preconditioner, conveyor dryer, classification equipment, metal detection and magnets.
The plant consistently runs three shifts Monday through Friday and operates on Saturdays as needed. As the plant expanded and level of activity accelerated, the need for energy also increased.
“It is critical that we have a consistent power supply to maintain operations,” added Bekermeier. “And we will continue to need more and more power as we increase capabilities.”
South Central Indiana REMC and Hoosier Energy are committed to not only ensuring that PacMoore has the capacity it needs daily, but also monitors usage and trends to anticipate future needs.
“Our team maintains strong communications with our customers to plan for growth,” said Wittman. “Customers like PacMoore represent a strong industry segment in our territory and we are committed to seeing them succeed.”
While PacMoore significantly contributes to the economic vitality of Mooresville, the company also is dedicated to what it calls the emotion quotient of its employees. Bekermeier said that family first is not just a catch phrase for PacMoore, but engrained in the corporate culture. From actively participating in the Indiana Dream Team, an offender rehabilitation and path to work program, to maintaining a “no work on Sundays” policy, PacMoore makes a positive work environment a top priority.
“The town of Mooresville and the entire community has embraced us and we work everyday to ensure that our employees come first,” said Bekermeier.
YOUNGSTOWN-WARREN: LEADING FOOD PROCESSING HUB
While once known for being one of the largest producers of steel in the country, the Youngstown-Warren, Ohio region has, over the past few decades, become home to thousands of businesses that represent diverse industries, including automotive, food processing, oil and gas, aluminum, metals, healthcare, distribution, contact centers and more.
The food processing industry, in particular, has grown exponentially in recent years, with nearly $50 million of investment just since 2014. The region is a hot spot for companies like AVI Foods, Anderson-DuBose Company and Summer Garden Food Manufacturing because of the abundance of resources they have access to, including water, available property, transportation, a skilled workforce and low cost of doing business.
More than 330 food-related businesses, from farming and container production, to candy manufacturing and food product distribution (but excluding restaurants and retailers), are located in the Youngstown-Warren metro—encompassing a population of nearly 554,000. The average wage in the industry is $16.24, and 7.5 percent of all manufacturing jobs in the area are food-related. What the region has to offer these companies is hard for them to resist:
- Access to an abundance of water and sewer services: The Meander Creek Reservoir provides water to most of the Youngstown-Warren area, with a capacity of 11 billion gallons. With food-related businesses having great need and heavy usage of water and sewer services, we have identified sites that have access to both.
- Available land sites with rail and good highway access: Youngstown-Warren is the only place that provides effective overnight ground access to New York City, Chicago and Toronto. Linking anywhere is effortless with easy access to interstate, rail, airport, waterport and state-of-the-art telecommunications.
- Low cost of doing business: The low cost of doing business and living here maximizes Return on Investment. Forbes and Entrepreneur magazines ranked the region as one of the best places for businesses to locate.
- Available skilled workforce: The region has long been recognized for its grit and “get-it-done” attitude. Our talented, available local workforce is proven to be among the most productive in the world, and low labor costs provide companies here with a competitive edge.
Just one example of a food manufacturer that is growing and thriving in the Youngstown-Warren region is Summer Garden Food Manufacturing in Boardman. Although the company opened in Youngstown decades ago, the owner could have relocated anywhere, as business boomed and a larger facility was needed. But he chose to stay in town.
Summer Garden Food Manufacturing opened in 1948 as a family owned and operated food wholesaler called the John Zidian Company in Youngstown. The business evolved in scope over the years, and when John’s son Tom Zidian took the helm in the 1980’s, he began to produce premium, homemade pasta sauces under the now-popular and nationally known Gia Russa brand.
To accommodate great growth, Zidian built a 50,000-square-foot “Green LEED Certified“ food manufacturing facility in 2009, situated on a 6-acre campus complete with an additional 11,000-square-foot building that housed an on-site research and development center, quality assurance laboratories and a Culinary Arts Center. In 2010, he purchased an adjacent building and property to expand warehousing and distribution. With the 58,000-square-foot addition, the campus grew to 10 acres.
According to Kenny Sung, Summer Garden’s chief operating officer, “The region is a great place for a food manufacturer like Summer Garden Food Manufacturing that is focused on quality and being a category leader. The area provides access to an educated workforce steeped in a strong work ethic, and people are the most instrumental resource to any manufacturing organization.”
Sung also noted that the region provides an ample, affordable supply of major utilities such as water, gas and electricity, and financial institutions are very supportive and active in providing the needed financial instruments required of manufacturing companies with a national and international focus.
Known for its creative product innovations, unparalleled quality and commitment to excellent customer service, Summer Garden Food Manufacturing continues to produce its flagship brand, Gia Russa, celebrity chef brands (Guy Fieri and Mario Batali), private label and store brands.
Other recent highlights and investments of food processors, supply manufacturers and distributors in the area include:
- Exal Corporation in Youngstown is highly regarded as an innovator in aluminum cans and bottles and has received awards for its bottling design. The company produces more than 470 million containers annually for major companies like Anheuser-Busch, Coca-Cola and GlaxoSmithKline.
- In 2012, Anderson-DuBose, Kellogg’s Snack Foods and PurFoods Inc. opened distribution centers in the region. Anderson DuBose supplies to McDonalds, Chipotle and other restaurants within a four-state region from its $30 million headquarters in Lordstown; Kellogg’s occupies 174,000 square feet of space in a distribution facility in Warren; and Iowa-based PurFoods expanded its market to the east coast by purchasing a facility in North Jackson.
- Valley Foods and AVI Foods, headquartered in Youngstown and Warren, respectively, provide prepackaged foods to educational, military, government and commercial markets throughout the nation. AVI Foods recently acquired Youngstown-based Serex Vending.
To more heavily focus on the growing agricultural sector that includes more than 7,000 northeast Ohio farms, including many in Trumbull and Mahoning counties, the Youngstown/Warren Regional Chamber and Ohio Farm Bureau formed a partnership and strategy to better service the industry that includes farming, food manufacturing, processing and distribution. The partnership offers business development assistance and connections within the industry.
In Youngstown-Warren, Ohio, the food industry shows no signs of slowing down. In fact, The Joseph Company International Inc. of California recently announced plans to build a high-tech, $20 million plant in Youngstown that will produce self-chilling beverage cans and employ 250 people when it opens in the next couple of years.
And that, undoubtedly, is just the tip of the iceberg.
NEW ‘OIL BOOM’ IN CALIFORNIA
Growing market demand for extra virgin olive oil (EVOO) from California has created opportunities that parallel the growth of the more recognized California wine industry. Some of these similarities include brand name olive groves with on-site processing and a growing demand by consumers for this healthy and delicious staple.
The California Olive Oil Council, a trade association with the mission of encouraging the consumption of certified California extra virgin olive oil provides data about the remarkable growth. According to COOC:
- In 2016, 38,000 acres were planted in California for the production of extra virgin olive oil. Estimates predict that 3,500 new acres will be planted each year in California through 2020. This results in an 8 percent annual projected growth.
- There are over 400 growers/producers of olive oil in California.
- Production of 4 million gallons of extra virgin olive oil was estimated for the 2015-16 harvest.
- There are over 40 mills in California with more under construction and/or expansion.
One of the companies leading the way in the growth of the olive oil business is Corto Olive Company of Lodi, California. With a climate and terrain similar to those used for olive groves in Europe, Lodi provides ideal conditions for growing olives. Corto Olive is part of a family business that started when Amerigo Cortopassi came to California from Italy in the 1920s.
Dino Cortopassi, Amerigo’s son, expanded the growth when he found a new way to plant and harvest olives in trellised, vineyard-style rows. This new process produces especially consistent, fresh-tasting extra virgin olive oil. Corto Olive was founded to grow and press premium olive oil.
Brady Whitlow currently serves as president of Corto Olive. He has been involved with the significant expansion of the past 10 years. Whitlow acknowledges several factors that are driving this growth, including outstanding quality of the oil available from California. Also, with focus on healthy diets, olive oil makes a smarter choice.
Corto supplies the commercial market with extra virgin olive oil sold mostly to restaurants. As evidence of Corto’s strong growth, last year the fourth expansion since 2005 was installed at the Lodi, CA facility.
Each of the expansions at Corto’s, Lodi facility have been constructed by Roland Construction, Inc. of Stockton, CA, an authorized builder for Varco Pruden Buildings. The most recent addition required a roof eave height of over 45’ to accommodate the 15, 30,000-gallon oil storage tanks. During construction, the tanks were lifted above the eave and lowered into position by crane.
With this latest expansion, Corto Olive increased its production capacity from six hundred thousand gallons to over one million gallons. This has them well positioned to continue their tremendous growth for years to come.
RESER’S FINE FOODS INVESTS IN TOPEKA
Reser’s Fine Foods, a leading manufacturer of freshly prepared foods, has announced plans to break ground on a 300,000-square-foot facility in the spring of 2017 for a new prepared salad plant. The company intends to invest $86.5 million and create 180 jobs through a two-phase project. Phase One will entail a $67 million capital investment in a new state-of-the-art plant. The project will bring an additional 40 jobs to the community with annual wages of approximately $25,000 plus benefits.
Currently, Reser’s has 1,100 employees at the Topeka campus, 390 of whom work in the prepared salad plant.
The new prepared salad plant will not only support the sustained growth Reser’s has experienced over the past several years, but also will position the company for future expansion. All manufacturing activities and jobs at the existing prepared salad plant will move to the new facility in January 2018.
In the past 25 years, Reser’s has built two plants and expanded both locations multiple times, built a truck shop and most recently added a large-scale, high-tech distribution center.
“Reser’s roots run deep in Topeka,” said President Mark Reser. “Our family and the company have been connected to the city for decades, and our long-standing partnership with the community has fueled the company’s growth. This new plant reinforces our continued commitment to this community today and into the future.”
Reser said the new facility is being designed to incorporate enhanced flexibility and innovations in food manufacturing to fulfill the varied demands of the marketplace.
In Phase Two, the company will make a facility investment totaling $19.5 million and create 140 new jobs. Phase Two has an anticipated completion date of fall 2019.
The Joint Economic Development Organizations approved a maximum incentive total of $665,000 to $329,000 for capital investment and $336,000 for job creation. The incentives are performance based and will be paid over a five-year period.
Mayor Larry Wolgast said an impact analysis study showed that the company’s investment will have a one-time $115 million benefit to the city and county. Additionally, the recurring impact is estimated at $90 million each year as long as the 180 jobs are maintained.
“Reser’s Fine Foods has been an exemplary employer in our community since its inception,” said Wolgast. “We are pleased that they have chosen to expand their presence again on the city’s east side to provide more jobs to people in our community.”
Shelly Buhler, JEDO chair and Shawnee County Commission chair, said, “Reser’s Fine Foods and other manufacturing companies can provide a gateway for employees to learn new skills and have opportunities to advance through the ranks while accruing full benefits. These new positions will allow employees to secure sustainable employment and access additional training.”
The one-time economic impact of the Reser’s expansion on Topeka is projected to be $115 million, and the recurring impact each year, assuming the 180 jobs are created, will be $90 million, said Matt Pivarnik, Greater Topeka Chamber of Commerce and GO Topeka president and CEO.
“It’s a pretty big capital investment with a brand-new facility,” said Jackie Carlson, director of business retention and expansion for GO Topeka, who worked closely with the company on this expansion.
“The incentives are in accordance with the guidelines that the GO Topeka board has adopted,” Carlson said. One incentive, $329,000, is tied to their capital investment and the second, $336,000, to jobs created on a sliding scale based on the wages paid.
“If they do not create the jobs, they would not receive any incentive for that particular position,” Carlson said. “Let’s say they only created 160 jobs, those 20 jobs that we had accounted for at this point in time, they would not receive any incentives for those 20. The higher wage they pay, the more incentive they can receive.”
Katcher said Reser’s also is exploring other incentives, such as a request for property tax abatements on the capital investment. “We are investigating all possible incentives,” she said.
“This new plant will allow us to produce much more of our current fan favorites, like Reser’s potato salad, macaroni salad and cole slaw,” Katcher said. “The prepared salads category has been experiencing steady growth for some time, and the products we manufacture are driving much of that growth. This new facility will ensure we are well positioned as our growth continues.”
Katcher said Reser’s has 17 plants in eight states, and each time they expand, they consider all options.
The Reser’s jobs being created pay about $12 per hour, but Barbara Stapleton, director of workforce and education at GO Topeka, said adding manufacturing jobs to the community is important economic development.
CARGILL BREAKS GROUND FOR OWASSO PLANT
Through an important public/private partnership, Cargill recently today broke ground on a new animal feed production facility in the City of Owosso, MI.
The company acquired a nearly 20-acre site from the city, located at 1509 W Oliver St., which will house a new 75,000-square-foot, $19 million plant focused on providing custom animal feed products to the dairy industry. The plant expects to be operational by December 2017, with plans to employ eight people at the start.
“The City of Owosso and the Shiawassee Economic Development Partnership have been wonderful partners on this important investment project for us,” said Tom Taylor, a commercial director for Cargill’s animal feed business in the U.S.
He added, “This centrally-located facility will enable to us to better serve the growing dairy population within Michigan, which is one of the top 10 dairy producing markets in the U.S.”
Cargill’s animal nutrition business currently has 43 manufacturing facilities across the U.S. The plant will be the first Cargill animal feed manufacturing facility in Michigan.
Several business, government and economic development partners were integral in helping move the project forward, including the City of Owosso, Sonoco, Michigan Economic Development Corporation, Great Lakes Central Railroad, Consumers Energy, CB Richard Ellis, Covenant Eyes, the Shiawassee Economic Development Partnership, MOOT, Rowe, VAA, Fessler-Bowman and Pumford Construction.
“On behalf of the local partners involved in this project, we are tremendously honored that Cargill has chosen Owosso as a home for one of its world-class facilities,” said Justin Horvath, Shiawassee Economic Development Partnership President/CEO. “This dynamic company provides many valuable goods and services to customers all over the world, and it is so exciting to know that they will now be producing some of these products right here in Shiawassee County. We also think this a great fit for our community, given our agricultural and manufacturing heritage, central location in the state and access to important transportation assets like the Great Lakes Central Railroad and Interstate 69. We wish Cargill the very best in this endeavor, and look forward to helping them succeed in our community for many years to come.”
OSWEGO COUNTY, NY: MORE TO OFFER
Situated in Upstate New York, Oswego County is located within hours of every major Northeast market and has the available industrial labor force, infrastructure, import/export capabilities and supply chain for growth in the food manufacturing sector.
A skilled workforce, with previous food processing experience, is ready to work in Oswego County and is supported by more than 30 institutes of higher learning and vocational training. Economic development partners, such as The Workforce Development Board of Oswego County and the One-Stop Career Center, create opportunities to bring workers and employers together and work with these schools to encourage the development of courses that enhance workers’ skills and meet the needs of employers.
Oswego County offers access to Interstates 81 and 90 for north/south and east/west movement. Over 25 carriers provide both local and long-distance trucking to and from Oswego County. Connecting lines enable transport to every major U.S. market. Local carriers provide transloading from truck to rail and offer warehouse storage options, including dry, climate controlled and frozen.
The Port of Oswego, a deep-water port on the southeastern shore of Lake Ontario, provides a major logistical advantage to industry in Oswego and the Central New York region. It is part of over 2,300 miles of water transportation from Duluth, Minnesota to the Atlantic Ocean and offers on-dock rail and truck loading for a smooth transition of goods to market.
CSX offers rail transportation throughout Oswego County, with direct access at several sites and industrial parks. CSX has a nearby regional switching yard for access to more than 21,000 miles of track in 23 states and the Canadian provinces of Ontario and Quebec, plus 70 ocean, lake and river ports. Coupled with nationwide transloading and warehousing, CSX makes rail a very viable transportation option for Oswego County businesses.
Syracuse Hancock International Airport is within minutes of Oswego County and has facilities for air freight transport, which includes a 53,000-square-foot cargo building. Oswego County also is a designated Foreign Trade Zone (FTZ) designed for the convenient and cost effective production of goods.
Food processing has traditionally required high quality and heavy capacities of industrial infrastructure, which is where Oswego County excels. High quality potable water and available capacity for industrial waste water treatment are available. Depending on your location, you could tap into nearly limitless water from Lake Ontario or access up to 10,000,000 gallons available daily from the Onondaga County Water Authority. There also are several options for water treatment, including municipal treatment and a future private treatment facility with over 5,000,000 gallons of excess capacity.
Additionally, many shovel ready sites are available in Oswego County. Within the industrial parks, all sites have utilities and other necessary infrastructure in place.
All of these advantages have enabled Oswego County to attract companies that have purchased existing facilities and expanded their food processing ventures. Champlain Valley Specialty (CVS) of NY, in the Town of Oswego, acquired the former Empire Fresh Cuts and Oswego Shippers and Growers. This established their apple processing facility closer to their suppliers and their market. CVS produces “Grab Apples” from locally grown apples that are sliced, packaged and shipped to local schools, retail markets, restaurants and their distributors.
Teti Bakery USA, Inc., is the U.S. subsidiary of Teti Bakery, based in Toronto, Canada and makes Italian bread products for supermarkets and restaurants. Teti Bakery’s acquisition, in the Town of Volney, is their first U.S. facility and is strategically located for product distribution in the Northeast and along the Atlantic coast.
K&N’s Foods USA, LLC, acquired the former BirdsEye plant in Fulton. They manufacture a variety of frozen valued-added Halal chicken products under the brand license from K&N’s Foods Limited, Pakistan.
At full capacity these projects represent a total of 480,000 square feet of food processing space with 440 new food processing workers employed in Oswego County.
For more information about Oswego County, contact L. Michael Treadwell, Executive Director of Operation Oswego County, Inc., at (315) 343-1545 or [email protected]