Many factors led Arkansas-based frozen baked goods maker De Wafelbakkers to choose Georgia over other states such as Virginia and North Carolina when it was deciding earlier this year where to locate a new $27.5 million plant.
The company landed in a vacant 92,000 square foot bakery in McDonough in Henry County, a move that will mean 242 new jobs when the facility opens in 2011.
“Employee base, distribution costs, weather, incentives and the building itself, those are the five things we tried to look at and evaluate,” said CEO Dumas Garrett, ticking off the case for locating in Georgia.
The only problem, Garrett said, is the local heat and humidity — “not our friend,” he noted — because of its impact on the bakery’s freezers.
That didn’t stop the company from coming, though, just as it hasn’t prevented many other food processing firms from locating in or expanding in Georgia.
The state is home to more than 875 food processing companies, according to the Food Industry Partnership, an industry trade group. They collectively employ more than 58,700 workers and are part of a bedrock business, representing the largest single sector in the state’s manufacturing industry, with shipments valued at more than $16.2 billion annually.
It’s also a growth area. State economic development officials said food processing companies they have worked with have committed to investing $1 billion and creating 7,000 jobs in the last five years.
Georgia’s food processors produce a wide variety of products including poultry, waffles, soft drinks, canned tuna, pet food and beer.
The list of companies with food processing operations in the state is a corporate who’s who. It includes: Coca-Cola Co./Coca-Cola Enterprises, Pilgrim’s Pride, Tyson Foods, Perdue, Kellogg Co., Frito-Lay, General Mills, Chicken of the Sea International, MillerCoors, Publix and Flowers Foods.
“We really feel food processing has been one of the bright spots in this economy for Georgia,” said Heidi Green, commissioner of the Georgia Department of Economic Development, an agency that helps recruit businesses to the state. “We’ve had some nice new companies come in, and also some existing ones growing.”
Earlier this month, King’s Hawaiian, the maker of sweet dinner rolls, announced its plans to open a bakery and distribution center in Hall County
The Torrance, Calif.-based company said it will create 126 new jobs over two years, and potentially add another 100 jobs in 2015.
Its 111,000-square-foot bakery and distribution center will be in Oakwood South Industrial Park. Production in it is expected to begin in the fall of 2011.
Georgia competed against South Carolina for the facility, according to state economic development officials who helped recruit the company. Georgia offered $2.7 million in job tax credits and a sales tax exemption on machinery, the agency said.
But it was more than that which brought King’s Hawaiian to Georgia, said John Linehan, executive vice-president for strategy and business development for the company. King’s Hawaiian was looking to locate within about a 250-mile area around Atlanta for its first production facility outside California.
“They didn’t throw money at us. Their incentives were very creative,” Linehan said. Specifically, he cited Georgia’s Quick Start program which provides workforce training at no cost to qualified businesses.
“There isn’t anything I’ve seen in the country like Quick Start,” Linehan added. “It’s a really quality product that differentiates Georgia. The training focuses on making Georgia workers very competitive, but in a productive way. It’s not so much about hourly wage, but more about the quality of the worker.”
Some of the typical factors that Atlanta and Georgia business boosters talk about as the area’s competitive strengths — such as roads and workers — played into the decision by De Wafelbakkers whose workers will make pancakes, French toast and waffles in the facility that formerly housed Spring Wheat Bakers. That maker of frozen bread dough and pre-baked pastry items closed in 2004, a decision that cost 75 jobs.
The company also will receive $1.57 million in financial incentives, including sales and use tax exemptions on machinery, and job tax credits.
Green said food processing companies look closely at Georgia, in part, because its central location, web of interstate highways, deep water port and large airport give them relatively quick and easy access to most of the country’s major consumer markets.
Atlanta, specifically, offers the largest population — and consumer base — of any market in the Southeast, and companies looking to locate in or expand in the region see advantages to locating close to the metro area.
State development leaders plan to continue to pursue food processing firms, which present an opportunity to grow a manufacturing sector hit hard by the economy. Not only is Georgia well-positioned to land them, officials say, but they’re part of an industry whose future is not in doubt: Everybody has to eat, and somebody has to make the food.