When it comes to the food-processing industry, “Everything is up,” said Ben Simpson, Membership Director at the American Bakers Association (ABA), a bakery-specific national and state trade association.
“We’ve got demand through the roof, but the cost of ingredients, costs of production—including electricity and natural gas, and labor issues are also way up,” he said. “It’s a very challenging operational environment.”
Even with the industry’s challenges, North Carolina remains a top spot for food-processing businesses—bakers included.
Along with being ranked the top state for business by CNBC and having the top business climate according to Business Facilities, North Carolina boasts several advantages for businesses, including:
- Lowest corporate tax rate at 2.5%.
- Industrial electricity rates below the national average.
- Building costs below the national average.
- Largest manufacturing workforce in the Southeast, backed by a network of universities and community colleges that support customized training.
North Carolina’s public power communities—those that own and operate their electric systems—are particularly well suited to meet food-processing industry requirements.
For manufacturers, even the slightest downtime can mean huge loses, so it matters that North Carolina public power providers keep the power on 99.98% of the time.
But food manufacturing isn’t typical manufacturing, explains Ron Fish, Assistant Director for Agribusiness Development in the N.C. Department of Agriculture and Consumer Services’ Division of Marketing.
Along with electricity and natural gas, water is critically important for food manufacturers. “That’s why we have an advantage over the West Coast,” Fish said. “We’re seeing major opportunities in the rural areas because of the availability of natural water.”
Bringing a food manufacturer into a community requires a lot of players to work together. Having electric, gas, and water services all under one roof—as is the case in many public power communities—simplifies the process.
Joe Parker, owner of JP’s Pastry, a gluten-free bakery located in the public power town of Benson, North Carolina, has developed a close partnership with the Town.
His is the only business on his block with products requiring refrigerators and freezers to stay viable. On some occasions, like when a bird flew into a transformer over the July 4th holiday, he has alerted the Town of an outage when his freezer’s power sensor pings his phone. Customers having that direct line to and personal service from their energy provider is typical of public power.
Rasma Zvaners, ABA’s Vice President of Regulatory and Technical Services, says the pandemic drove some of the through-the-roof demand for baked goods Simpson mentioned. But even before the pandemic, artisan and niche products were on the rise.
Brenna Favara agrees. She’s a marketing specialist with the N.C. Department of Agriculture and Consumer Services who works with the Got to Be NC program and the North Carolina Specialty Foods Association. She gets applications daily for Got to Be NC—usually from smaller companies that make craft-type products—and said the specialty foods group has more than tripled its membership in the past year.
That wouldn’t surprise Parker. “We’ve been here eight years, and it’s become a destination,” he said. “People walk in here and start crying because they find food they can eat.”
“These consumer trends have caught the attention of a lot of international companies,” said ABA’s Ben Simpson. “We’ve talked to a lot of companies that don’t have a production presence in the U.S. and are starting to build a sales and distribution footprint for their more French bread brioche-level products. Those sales are really strong.”
When those companies come looking for a new home in the U.S., North Carolina will be ready with the perfect recipe of reliable public power, available workforce, and ready sites.